I continue to get frustrated!! With two contracts this month I continue to run into situations where the appraisal falls short of the contract price. The concerning part for me is that the contract price on both of these sales are below the tax assessment performed by the County tax collectors office. How can the County place a higher value on a property than a certified appraisal professional? Two years ago the rule of thumb is that the tax value of a property was lower than the actual value. Do we have a new paradigm shift in today’s market?

My concern is that the value is being placed lower than what the contract price is. Buyers are not going to purchase a property for more than the appraisal and the sellers are reluctant to reduce the price any more. I am concerned that the appraisers are the tail that is wagging the dog. With continued declines in property value the condition of the real estate market’s future lies in the hands of the appraisal industry. If they continue to declare lower values of properties, the downward spiral effect will continue to drive the medium home prices down. With not throwing out distressed properties during the appraisal process traditional resell home sales are being tougher to get a “solid” appraised value.

When will we stop this free fall? Is there anything that we can do to influence this?

In all the years as a real estate expert, investor and sales agent I never noticed “squatting” like I do today. Squatting is where people reside illegally in a vacant dwelling.

On several occasions now I have shown homes that were vacant according to the listing agent and when I arrived it was not. At first I thought it was tenant occupied since many of the short sales are occurring today when the primary owner moves out of the residence and allows a tenant to rent short term until the house gets sold or goes foreclosure and collects on the money while not paying the mortgage with it or paying very little to the mortgage. In essence, the owner is getting out while they can get into another situation and then renting out there home where they are delinquent on the mortgage and trying to sell it through short sale and they are profiting from renting that unit out.

Anyway, I found that this townhouse had an air mattress and a few things inside the home like clothes baskets, large 50 gallon bags of stuff and a few odds and ends. At first I thought must be moving in or just moving out, but as I began to show more homes in that area, it was obvious to me that these people were living in these homes illegally. This was even more apparent after I called the listing agent and said that the house was not vacant and that he must have made a mistake. He affirmed that the place is empty and on a key box.

I have shown that same unit several times and more people have moved in and out of it. There is more evidence of squatting in my local area than people probably want to admit. I think having them shack up in some vacant home gives the illusion that we don’t have a homeless problem like other medium size towns. This certainly is not true.

I will leave you with a thought. What are these “squatters” doing? They are trespassing. They are breaking and entering to a residence that does not belong to them. They are not paying rent and in some cases I have seen there has been evidence of drug use like hypodermic needles. The good paying neighbors in this area I don’t think have a clue. But if it is not addressed, what will happen to the neighborhood, the resale value of the homes and the safety of the other neighbors?

Tell me what you think and how you would handle this.

With Gulf front and Golf course properties being my primary focus, the second home real estate market has also seen a slight decrease in transactions and an increase in properties for sale. It shows that no matter what social economic class people are in, everyone appears to be tightening the belt even if just a little. With hope and optimism I foresee that a shift in the second home market will occur soon.

Many owners of secondary homes are finding that their properties have also taken hit on their equity. Some people who own gulf front properties have listing prices that would compare to 2005 prices. With the other great ownership opportunities these properties may be taking a back seat to the “Equity Buys”. Those that would be interested in and potential buyers may not be comfortable to act at this point in time.

Although I may be more optimistic then those pulling out their check books, or in this case not pulling them out, I do believe that we will see a visible shift come at the end of summer. There has been significant momentum in the stock market over the past three months, the unemployment rate appears to be leveling out and consumer confidence has once again been gained. If you look at the recent earnings releases from some retailers, not only are they reporting better than expected earnings and profits, they are also reporting sales increases over the same period last year.

As many people would admit, we were in a recession long before the experts called it this. Although we all understand that we will not snap back out of it, we are looking forward to the continued progress we have seen.

Second home sales will regain momentum slightly quicker than other existing home sale statistics. With the population of these buyers having more disposable income and typically in a better financial situation, they will start to invest in this lifestyle faster. If for no other reason than their recovery from the current economic status will take less time, they are typically still gainfully employed and they are starting to invest in other aspects like the stock market.

How do you feel the second home real estate market will fair in the next year?