The question nowadays from both buyers and sellers is how do REOs, short sales, and foreclosures affect sales? Today REOs, short sales, and foreclosures dictate a number of variables with the sale and price of your home including the price percentage increase or decrease, or valuation, of your home or property to the days on market, or how long it takes your home to go from listing to a sale. With that being said we are going to take a look at how homes in the Chattanooga home market on average are selling to see how REOs, short sales, and foreclosures will affect you in the purchasing of a new home or the selling of your property.
Let us take a moment to define the three terms we have here: REOs, short sales, and foreclosures.
1: REO: this is a term defined as “real estate owned”. This property is defined as being a class of property owned by an institution. The REO can be owned by a bank, government agency, or a government loan insurer. This property usually transfers ownership to one of the three after an unsuccessful attempted sale at an auction in which the property is listed with a real estate agent or broker to market, list, and sale the home on behalf of the institution.
2: Short sale: this is a term widely understood as a “pre-foreclosure sale”. This property is being offered by the mortgage borrower, whom is behind on payments or has an agreement with the bank to sale the property, before the mortgage borrower defaults on the terms of their mortgage to the mortgage lender, or lienholder. Most short sales have not only the mortgage borrower, or original home purchaser, that need to agree on the purchase price, but also the mortgage lender, or mortgagee, needs to agree on the terms and price of the sale.
3: Foreclosures: this is a term understood in general terms to be “a home repossession sale”. The possession of this property is taken by the mortgage lender, or lienholder, and the mortgage borrower is no longer in possession of the property or mortgage. Full possession of the property has been awarded to the mortgage lender by this point through all legal means. This type of property is usually purchased with the understanding minor work and fixtures will need repaired.
Now that we have defined each type of property, REOs, short sales, and foreclosures, we will move to how these properties affect our current market in the Chattanooga area.
From the chart above we can see that from 2012 to our current to date statistics in 2014 that overall sales have been on the move upward at a steady increase with fewer and fewer of those homes sold being REOs, short sales, and foreclosures within the same time period. Take 2012 for instance with 4904 homes overall being sold within our MLS and 1489 of those being REOs, short sales, and foreclosures combined. If we take the same figures from 2014 to match them up we notice 5362 homes were sold with 830 of those being REOs, short sales, and foreclosures combined for a total of 13 percent less REOs, short sales, and foreclosures sold in just approximately 24 months.
|Year||Overall Home Sales||REO/Short Sales/Foreclosures||Percent of Overall Sales|
So what does this mean to you as a seller? Does this mean that there are less REOs, short sales, and foreclosures being sold or are there less REOs, short sales, and foreclosures available to market?
Below we see homes that may fall into the definition of REOs, short sales, and foreclosures.
In general the overall thought is that there happen to be fewer REOs, short sales, and foreclosures to sell which has driven some home values higher within the MLS as displayed on the chart below. The upward turn is due to a shortage of readily available REOs, short sales, and foreclosures properties listed at below market price throughout the MLS causing home values to decrease as more and more REOs, short sales, and foreclosures came upon the market.
|Area||YTD Sales Percentage||2013 Average||2014 Average||Percent||2013 Days on Market||2014 Days on Market||Percent||Months|
|Area 1 Lookout Valley||3.3||$247,000||$220,000||-10.90%||109||124||13.7||5.6|
|Area 2 Downtown||-5.40%||$119,700||$132,600||10.80%||147||112||-24.10%||10.4|
|Area 3 City of East Ridge||-8.90%||$95,500||$97,000||1.60%||121||123||1.70%||8.3|
|Area 4 Brainerd – East Brainerd||-.30%||$135,000||$145,000||7.40%||128||135||5.60%||9.5|
|Area 5 Highway 58||-18.40%||$87,750||$104,000||18.50%||117||138||17.60%||10|
|Area 12 Harrison||15.60%||$133,250||$136,950||2.80%||129||123||-4.50%||8|
|Area 6 North Chattanooga||-5.40%||$195,000||$200,000||2.60%||124||130||5.20%||5.1|
|Area 7 Red Bank||-8.60||$108,500||$112,000||3.20%||117||102||-12.40%||6.2|
|Area 8 Hixson||15.40%||$160,000||$162,000||1.30%||109||123||12.60%||7.1|
|Area 9 Signal Mountain||-5.30%||$280,000||$290,500||3.80%||117||136||9.2|
|Area 10 Lookout Mountain||9.10%||$318,000||$339,500||6.80%||151||147||-2.50%||15.7|
|Area 13 Soddy Daisy||-6.30%||$163,000||$165,700||1.70%||126||128||2.00%||7.8|
|Area 28 Sequatchie||-7.80%||$100,000||$119,900||11.90%||141||171||20.80%||14.3|
|Area 15 Hunter Road||-5.50%||$162,000||$155,000||-4.30%||119||116||-2.70%||4.8|
|Area 16 County Ooltewah||-4.70%||$214,500||$216,000||.70%||117||130||10.70%||7.3|
|Area 17 Snow Hill||9.30%||$253,875||$235,000||-7.40%||136||142||4.40%||8.2|
|Area 18 Collegedale||-26.50%||$234,450||$231,000||-1.50%||168||118||-29.50%||10|
|Area 11 Catoosa County||-6.20%||$129,450||$127,500||-1.50%||118||125||6.30%||7.6|
|Area 19 Walker County||-4.70%||$85,000||$90,000||5.90%||112||126||13.10%||10.3|
|Area 20 Dade County||6.50%||$93,500||$79,000||-15.50%||156||172||10.00%||15.4|
If you would like more information about this area or any other area of Chattanooga, please contact me, Brandi Pearl Thompson, or visit my website greaterchattanoogarealestate.com
Brandi Pearl Thompson specializes in helping all people buy and sell homes within Catoosa County, Dade County, and Walker County in Georgia and Hamilton County, Marion County, Sequatchie County, Bradley County in Tennessee. Brandi Pearl Thompson services Chattanooga, Ooltewah, Hixson, Soddy Daisy, Red Bank, Harrison, Ringgold, Signal Mountain, Apison, and Collegedale. She can help you regardless of the type of home and price range, big or small…she sells them all.
If financing is an obstacle for you, Brandi Pearl typically has the solutions you are looking for and can offer creative financing alternatives. If you do not qualify for financing she will NOT turn you away and we will help you get positioned so that you CAN buy a home from us in the future. Brandi Pearl does not succeed until you succeed and are living in your new home.
Brandi Pearl Thompson has been licensed for eight years and has worked at RE/MAX Properties North and works at Keller Williams. Having relocated into the Greater Chattanooga area over 10 years ago, she now calls Chattanooga home.
The areas I serve are here:
Chattanooga Valley, Georgia, Chickamauga, Georgia, Indian Springs, Georgia, Lakeview, Georgia, Lookout Mountain, Georgia, Ringgold, Georgia, Rossville, Georgia, Trenton, Georgia, Kensington, Georgia, Rising Fawn, Georgia, Wildwood, Georgia, Fairview, Georgia, Fort Oglethorpe, Georgia, LaFayette, Georgia
Dunlap, Tennessee, Fairmount, Tennessee, Jasper, Tennessee, Kimball, Tennessee, Lakesite, Tennessee, Lookout Mountain, Tennessee, Monteagle, Tennessee, New Hope, Tennessee, Powells Crossroads, Tennessee, South Pittsburg, Tennessee, Walden, Tennessee, Whitwell, Tennessee, Apison, Tennessee, Bakewell, Tennessee, Birchwood, Tennessee, Falling Water, Tennessee, Haletown, Tennessee, Hixson, Tennessee, Lone Oak, Tennessee, Sale Creek, Tennessee, Orme, Tennessee, Ridgeside, Tennessee, Collegedale, Tennessee, Harrison, Tennessee, Ooltewah, Tennessee, Signal Mountain, Tennessee, East Brainerd, Tennessee, East Ridge, Tennessee, Middle Valley, Tennessee, Red Bank, Tennessee, Soddy-Daisy, Tennessee, Cleveland, Tennessee, Chattanooga, Tennessee
Alton Park, Avondale, Brainerd, Bonny Oaks, Bushtown, Clifton Hills, East Brainerd, East Chattanooga, East Lake, Eastdale, Ferger Place, Fort Wood, Foxwood Heights, Glenwood, Highland Park, Hill City, Hixson, Highway 58, Lake Hills, Murray Hills, Jefferson Heights, Lookout Valley, Tiftonia, Wauhatchie, Lupton City, Missionary Ridge, North Chattanooga, Orchard Knob, Pineville, Ridgedale, Riverview, Rossville, Southside, Stuart Heights, Tyner, St. Elmo, Woodmore