Why We Dont Think There Will Be A Wave Of Foreclosures In The Tampa Bay Area

Dated: August 10 2020

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Why We Don't Think There Will Be A Wave Of Foreclosures In The Tampa Bay Area

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According to the team at First American, a wave of foreclosures from the recent COVID-19 Pandemic is highly unlikely due to several factors. Below, we break down those factors and information for you. As always, we want our clients and neighbors to have the facts and important info when it comes to dissecting our current and future housing market in the Tampa Bay area.

Here's Why We Believe a Foreclosure Crisis Isn't On the Way:

  • The initial fears that homeowners in forbearance on their mortgages could reach up to 30% haven’t materialized in the U.S., with rates only reaching 8.6%. It’s been steadily falling as well.

  • There’s a “dual-trigger” that often creates a foreclosure outcome. Those triggers are economic hardship AND lack of home equity.

  • Lending standards are much more strict than they were in 2008, meaning household debt-to-income ratios are at the lowest we’ve seen in 4 decades.  

  • Homeowners in the Tampa Bay Housing Market and across the U.S. currently have more equity in their homes than they’ve had in 3 decades.

  • If unemployment (which has been steadily declining since June) reached the same levels we saw in 2010, there would be nearly 40% less foreclosures than there were back then due to the higher amount of equity homeowners carry today.

We mention equity several times in the above points, namely because in a market like we have in Pinellas County and the Greater Tampa Bay area, homeowners who hit hardship such as unemployment, mortgage forbearance, or even mortgage delinquency would ideally still have options like selling their homes or refinancing to get them through tough times.

For example, if a family who has a loss of income sees they can no longer afford their home, but has $75,000 of equity in it, then realistically they could sell their home in our ‘inventory-starved’ market for top dollar and pay bills, rent, etc until they get back on their feet with the equity from the home they sold. While not ideal, the situation doesn’t mean foreclosure is the outcome here. It’s also why we say real estate is one of the greatest investments a person can make. In times of hardship, the real estate investments you’ve made may just be how you dig yourself out of an unexpected and unfortunate situation.

To see the full article from First American, CLICK HERE

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Andrea Hartmann

Andrea is the Managing Partner of The Sandy Hartmann Group and runs the team alongside Sandy Hartmann. She would love to talk to you about real estate! Andrea was born and raised in the Tampa Bay a....

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