Tampa foreclosures in shadow inventory may further depress prices in the area in 2010 if they are actually released to the residential market which is already struggling from price decrease rates that have already exceeded 40 percent.
Tampa real estate professional Tony Polito stated in a meeting held by the Tampa Bay Builders Association that he believes there are more than 14,000 houses in shadow inventory, in addition to the 28,000 units already in real estate listings.
Shadow inventory, according to realtors, consists of houses that should have been listed for sale but were not because of economic reasons. This inventory includes repossessed homes, houses in short sales, pre-foreclosure homes in bank listings and homes being sold by owners who have not released them to the market because of extremely low prices and lack of buyers.
Home builders in Tampa have reasons to dread the so-called shadow inventory because they have already suffered much from cheap homes in 2009. In Tampa Bay and in most other markets, 2009 had been the worst year in new home construction. Now in 2010, builders are still seeing large numbers of homes that are being offered for rent by investors but are ready to be sold if there are buyers.
Banks, meanwhile, are not talking about their shadow inventories of distressed properties. But analysts contend there are lots of Tampa foreclosures not yet released to the market because of the gap between reported foreclosure filings and actual foreclosures.
In Hernando County, which is part of the Tampa-Clearwater-Saint Petersburg metro area, along with the counties of Hillsborough, Pinellas and Pasco, a total of 3,322 foreclosures were posted in 2009, averaging 277 foreclosure actions per month, based on data from the county court.
According to court clerk Karen Nicolai, 2009 showed her the biggest number of foreclosures in all her more than 30 years working for the county. She added that the volume has been overwhelming the court and that the mediation scheme launched by the Supreme Court will only slow down the court process.
Meanwhile, real estate professionals in Tampa and in other parts of Florida were encouraged by the recent decision of Fannie Mae to help the Florida condo market by allowing buyers of units in several struggling condo projects to use Fannie Mae-guaranteed loans. Fannie Mae has instructed its Florida staff to review the status of condo projects which were previously rejected for Fannie Mae loans.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.
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