Land O Lakes Real Estate News - JLS Investment Realty

Conventional home sale prices beat foreclosures by 50%

Michael Egger/STAFF

Brandon real estate agent Brenda Wade has a white board in her office that shows traditional sales versus foreclosure and short sale home listings.

By SHANNON BEHNKEN | The Tampa Tribune    Published: April 18, 2011

But overall sales data may not tell the whole story, according to data analysis from Tampa real estate firm Home Encounter.

The company pulled out foreclosures and short sales and looked at the rest of the market. That shows conventional sales prices in a seven-county area around Tampa sell for 50 percent higher than distressed sales, said Home Encounter executive Peter Murphy.

"If you have a nice home, you've maintained it well and you're not in a distressed situation, you may be able to hold your price, ask a little more than what you thought you were able to ask," Murphy said.

Consider what Murphy found in March. The median sales price for a distressed home that month was $79,000. Homes that aren't distressed sold for a median of $161,000.

There are so many distressed homes, though, that it weighs on the market and pushes the area's median price down, he said.

"You have more than 50 percent of your sales in the foreclosure and short sale category," Murphy said. "You pull the foreclosure and short sales out of the picture and we have conventional sales [prices] actually increasing in the Tampa Bay area."

Distressed homes typically aren't in as good condition as other homes and sell for less. However, Murphy said the "huge disparity" between bank sales and conventional sales doesn't make sense.

"If they were looking at conventional sales they might make a better decision on how to price and sell their homes," Murphy said. "It seems lenders are just trying to dump bad loans and sell homes for less than they have to."

Murphy said his company's take on the data is good news for sellers in stable neighborhoods but not for those in area saturated by foreclosures. That's because appraisers use nearby comparable sales to determine a home's value.

Brandon real estate agent Brenda Wade said recent data from homes she's sold support Home Encounter's findings.

"That's the kind of data I see in my normal day-to-day," she said. "The foreclosure prices are dropping and investors are swooping up those homes. But the regular home sellers are seeing much better prices because their homes are usually in better shape."

Plus, Wade added, traditional sellers can close sales much faster because they don't have wait on bank approval.

So how can make sure you're not asking too little – or too much?

To prove their point, the executives at Home Encounter agreed to open their database for free for a limited time. Go to www.homesalesstats.com and search recent sales of comparable homes in your neighborhood.

http://www2.tbo.com/content/2011/apr/18/181642/conventional-home-sale-prices-beat-foreclosures-by/news-breaking/