MANATEE -- Investment groups have been driving up foreclosure sale volume over the past year, which is helping drive up the price of existing houses in Manatee County. Manatee County Realtors report a trend of investors buying existing homes with cash, renovating them and converting them to rentals. That pattern drove new home sales up 23 percent year over year based on April sales numbers.
Deanna Atkinson, president of the Manatee Association of Realtors, said investors can make high cash offers, eliminating negotiation and drive up existing home prices.
Building a home or buying from a developer may be the only options for home buyers who need a mortgage.
"They are coming in and scooping up a lot of existing inventory, really making it hard for a first-time home buyer who needs financing and has to have a mortgage," Atkinson said.
Investors typically spend $30,000 to renovate the home.
Debbie Roth, who specializes in bank-owned properties for RE/MAX Alliance Group, said the trend doesn't affect all first-time home buyers because the investors are typically buying homes in the $125,000 to $180,000 range.
"That's not going to affect most first-time home buyers because they're looking in a lower price range," Roth said.
Other first-time home buyer programs exist for more affordable houses in the $60,000 to $80,000 range, Roth said, but with investment groups scooping up properties in as fast as 17 minutes on the market, home buyers have to readjust their buying strategies.
Trends in Manatee County's housing market will be discussed during "Boom, Bubble or Bust," a sold-out panel discussion Friday at the Lakewood Ranch Country Club featuring Rex Jenson, president and chief executive officer of Schroeder-Manatee Ranch; Neal Communities CEO Pat Neal; Michael Saunders & Co. CEO Michael Saunders; and John Tuccilo, chief economist for Florida Realtors.
Foreclosure sales increase
RealtyTrac, a leading real estate data company, released
foreclosed and bank-owned home sales Wednesday.
The first-quarter U.S. Foreclosure & Short Sales Report shows 190,121 properties across the country in some stage of foreclosure or bank-ownership sold during the quarter, a decrease of 18 percent from the previous quarter and down 22 percent from the 2012 first quarter.
Compared with last year, Manatee County foreclosure-related sales increased 4 percent in the first quarter over the same time in 2012, while Florida saw a 6 percent increase.
The Tampa and Miami metro areas have some of the highest foreclosure-related sales rates, at 27 percent and 28 percent, respectively. Manatee County wasn't too far behind at 23 percent, while the metro area, which includes Sarasota and Venice, is at 11 percent.
"I think some of that may be additional release of foreclosed property in the market place," said Peter Crowley, president and co-owner of RE/MAX Alliance Group, with offices in Sarasota and Manatee counties.
Buyers are still looking for bargains, he said, whether it's investors or first-time home owners, so foreclosed and distressed properties are the first place to look.
Buyers have to be strategic to beat investors, Roth said.
"The biggest problem is buyers want to look for properties a week out," she said. "They're not moving the way they should."
Roth encourages buyers to find an agent they trust, and start making appointments to see homes during the work week, especially Mondays, when there is less competition from other buyers.
"That's one of the biggest issues we're seeing is when somebody buys it up from under them when they weren't willing to go see it," she said.
REO sales down
Bank-owned home sales comparisons are a bit murky. The 275 sales in Manatee for the first quarter represent a 17 percent drop from the previous quarter and a 4 percent drop from last year.
The state registered a 12 percent bump in bank-owned home sales compared with last year, while the nation dipped 23 percent. Florida is one of 11 states with bank-owned home sales increases, according to RealtyTrac.
Nationally, bank-owned home sales are at the lowest level in five years, according to RealtyTrac.
Third parties bought 101,371 bank-owned properties in the first quarter, down 16 percent from the fourth quarter of 2012 and down 23 percent from the first quarter of 2012. The first-quarter total was the lowest quarterly number of such sales since the 2008 first quarter, according to RealtyTrac.
"Nationally, the foreclosure market is reaching its correction point, working through high volume over the last several years, but there are a few pockets, Florida being one of them, that has some inventory to work through," Crowley said.
Despite fewer sales, buyers are getting more bang for the buck compared with last year when the average discount on a home was 24 percent. Bank-owned homes sold on average for $122,993, which is 9 percent less than last year, and represents a 34.5 percent discount.
Charles Schelle, business reporter, can be reached at 941-745-7095. Follow him on Twitter @ImYourChuck.