Large Discounts on Bank Owned Homes in Tampa Are Ending

pricture of rising home pricesWhere have the bargain bank-owned properties in Tampa Bay gone? Prospective homebuyers who have put off taking advantage of the significant savings on foreclosed homes now owned by the bank are starting to ask that question. The hot tip for several years is seek out a foreclosure for an excellent bargain. The low prices were a result of the banks trying to unload millions of dollars of worthless debt from their books. Zillow recently announced the results of a study showing numbers for mid to late 2012, demonstrating the decline of savings in foreclosure purchases across the nation.

Bank owned properties in Tampa sold for nine percent less than comparable non-REO sales in September 2012. The discounted price slipped just .5 in twelve months, but represented a twenty-nine percent change from discounts of November 2008. The current Orlando REO discount of 4.6 percent is higher than the two percent discount in September 2011, but far less than the 24.4 percent discount during the first month of 2010.

The Miami-Fort Lauderdale area painted an equally dismal picture:

  • Current REO average savings 2.9 percent.
  • Decline of nearly 7 percent in September 2011.
  • Overall drop from the August 2008 peak of 22.7 percent.

National Comparisons

The trend is similar on a national level:

  • Metro area foreclosure discounts are down approximately 77 percent.
  • Some metro areas peaked at over 30 percent in 2008/2009.
  • All metro areas show declined discounts.

The national September 2012 REO discount average was 7.7 percent, a drop of 1.4 percent over the past 12 months. The higher the demand is for homes in a certain area, the less foreclosure discount is offered. Two cities with high housing demand, Las Vegas and Phoenix, offer no discount on foreclosure re-sales, but successfully market those homes due to the limited number of homes available for purchase