Since the hard-hitting economic downfall, people have been doing what they can to recover, but in terms of real estate local residents still find themselves asking: well, now what? Is now the right time to buy a house? What trends are happening in the market? Should we ever expect a full turnaround? Is there some relief in sight?

While most of these questions depend upon the circumstances of the buyer, there are certain situations that are emerging as trends.

The biggest trend that appears to be dominating the market is short sales. A short sale is what the name suggests: it is a sale that is being sold short. The sale amount will be short of the owed amount because, for example, the bank realizes that it will not be able to get back the full amount of its loan.

Potential buyers are also looking at real estate owned (REO) properties and possible foreclosures.

“They obviously realize there are some opportunities there to purchase homes at discounted pricing because of that,” says Shad Tome, president of Harmony Development Co. Harmony is a sustainable community in Florida with high-energy efficient homes located in Osceola County, just outside of the medical city in Lake Nona, according to their website.

While most buyers are taking advantage of the discount of bank-owned homes, real estate agents are seeing some new construction because of an upward movement that is happening on the pricing on the bank-owned transactions.

“It’s usually in select situations where people are looking at a short sale and the amount of work they may have to do post-closing with the bank,” says Tome.

Tome explained that they are also seeing unique cases where the appraisal is coming in a “few dollars” - using the example of a $1,000 or $2,000- over what the contract price is. It is an occasional situation because of the amount of transactions that are taking place and the multiple offers that are submitted on the same home.

“We haven’t seen that happen before in our district for quite some time,” Tome says. “I would say probably the last two or three years.”

The other “buzz word” right now is strategic default, says Karen Spell, an East Orlando real estate attorney located on Alafaya Trail. Strategic default is when borrowers decide to stop making their payments. It’s a decision to not make their payments despite having the financial flexibility for them.

“Homes are on the market for a shorter period of time,” Spell says. “There are less homes on the market than when we were at the worst. We are not back to what I would consider normal and we won’t be for a while.”

In addition to these up-and-down trends, there are a few challenges the market will face before reaching some kind of stability. One of the obstacles, Tome explained, is that the federal government ran a program for “first-time homebuyers” that expired at the end of April where a $8,000 credit could be received toward their purchase.

“We’re in a period where the really challenging thing will be if the [federal government] doesn’t come out with a new program that will be sustainable, will people still be out looking to purchase without having that incentive or that carrot that was out there with the $8,000 tax credit?” Tome says.

As a result of the lost incentive, Tome said that some builders are offering their own incentives to entice those that used the tax credit to come back into the market. He believes that it’s a challenge because potential buyers may be waiting for the federal government to extend the program that offers credit.

“We’re easily looking at another year until we’re at a point where we can confidently feel like we’re able to predict month to month the amount of transactions that we can do without the requirement of some type of federal incentive to make it happen,” Tome says. “That people are purely buying homes based on the fact that it’s a good purchase, they feel stable at their job, the economy’s improving and they’re buying because that’s right American thing to do.”

Article by Shayla Silva