A second wave of foreclosures is set to hit the market sometime next year. About 7 million properties are destined to go into foreclosure according to a September study by Amherst Securities Group, compared with 1.27 million properties in early 2005. This could potentially undermine housing recovery efforts as more homes add to the inventory and drive down prices.

There is often a long lag time between a borrower going delinquent and the bank taking the home. Below are some reasons:

Moratoriums: New state laws imposing short-term moratoriums have slowed the timeline from delinquency to foreclosure.

Overwhelmed lenders: Banks dealing with a surge in refinancing, mortgage modifications and defaults are overwhelmed with demand, so it can take londer to intiate a foreclosure sale.

Modifications: Many loans now are first examined to see if they might qualify for a modification. This drags out the timeline and means it is taking longer for homes to go into foreclosure.

Asset write-downs: Banks may in part be waiting to liquidate homes through foreclosure because they do not want to write down the value of the asset. Lenders can keep homes on the books at a higher value until they are sold at foreclosure.

According to Moody’s Economy.com “There is a lot of foreclosed properties in the pipeline that will hit the market and depress prices. Foreclosed homes often sell at prices below those on the market and can therefore drag down overall home values.

Home sales in Brevard County are starting to sizzle, but the prices are not soaring. The sun is still shining and home sale activity is the first sign of economic recovery. Keep in mind that prices will never go up until the market becomes balanced. What that means is that that number of sales are consistently similar to a given time frame.

To get to that point the following must occur. The volume of sales must top the number of listings to create a scarcity in the market. When scarcity occurs it creates demand and demand increases the market value of the property. In esssence, more buyers than sellers.

Unfortunately, the reality of this Brevard County Real Estate market is that prices are continuing to drop. Sellers need to know that oversupply exists. Much of this oversupply is short sales and foreclosure properties.

When selling the sellers need to be aware that they are up against this type of listing. Short sales can take months to close. The information needed for lenders to complete these short sales is immense. The seller must prove a hardship and show all their financial information in order for the lender to consider their property as a short sale. This should be done immediately so as to not hold up the process. In this timeframe the buyer needs to exercise patience and be ready at a moments notice to proceed with the sale. That means they need to have all their financing in place.

The seller is in control of the property and will need to sign off  on the contract. Which they should do if the property has been properly priced by their realtor. Then the negotiating starts to take place between the title company and the lender. Although each lender and situation is different if the sellers realtor has a good team in place this should not be a lenghty process. If a buyer truly wants the property they will need to be patient and the transaction will occur.

Keep in mind that there are also very good values in the Brevard County, FL  home sale inventory that are good values that are not short sales. Right now is a great time to buy as mortgage rates continue to drop.

The time is right and Brevard County is a great place to buy.