Clearwater-Largo -Seminole Real Estate
Noah Curcio

Zombie Homes, Shadow Inventory and the Current Real Estate Market

When no one makes the desired bid at a foreclosure auction the bank (Mortgage Company) buys it and puts it in inventory. The bank’s asset manager controls the inventory and schedules the sale. They do not go up for sale right away for a number of reasons. One being that if they all went on the market right away there would be a glut. That is what happened in 2009. There were too many foreclosed houses on the market and prices crashed. The asset manager has vendors (Real Estate companies) that handle the maintenance and sale. It is next to impossible to get to the asset manager because he has way too many properties for him or her to be involved in the individual sale process So the sales are delegated to the Vendors.

Most foreclosures back in 2009 were in really bad condition because they were stripped by the owners who were mad they had to leave their home. When I say stripped , I mean stripped all he fixtures, Plumbing , Electrical, Appliances and AC. In some cases they punched in all the walls, doors. and windows.
These houses could only be sold for cash and they sat for a long time. Finally 2 things happened. First large investor groups started buying houses in lots of 50- 100. They started rehabbing them and renting them out, 2nd the banks got smart they started to hold back the houses in their inventory and trickled them out after they made minimum repairs. Some of the houses became shadow inventory or zombie homes. Basically the bank started foreclosure , the owners moved out in some cases trashing the place on the way out but the hose was not foreclosed on. Why, well a number of things affected the process. First the courts were backed up. There were so many foreclosures and many were challenged by the home owner that it could take a number of years to get to the case heard. Second, the Banks were in disarray, Banks went bust and were taken over by other banks that went bust and were taken over by yet another bank. Their files were a mess and paperwork was missing. The paperwork that was vital to the foreclosure. So these home were vacant and in disrepair and no one was doing anything except a few unscrupulous people that moved in to some of these homes or rented them out as if they owned them. But that is a story for another day.
Things started to clear up in the last two years and that is why there are so few homes on the market. In 2009 we had over 15 months worth of inventory in the Tampa bay area, too many homes and prices fell. It was a Cash Buyers market as the properties could not be financed. No one who had a good home that wanted to sell would put it up for sale because they could not get a good price so only crappy homes were on the market except for Luxury homes above $450K. Now we have less than 3 months worth of inventory which makes it a Seller’s market. In 2009 the median price for a home was under $140K Now it is $230K which is why any home under $200K in decent shape in a decent neighborhood sells in 1-3 days. That is why one needs an agent to find a home buy. Zillow isn’t going to cut it. By the time Zillow posts it for sale there may be two or three offers on the place. An Agent can set up a search engine that will send you an email or text the minute a home shows up for sale.

This week 2 homes went on the market Tuesday at 9:00 and by 4:00 they were a pending sales. Zillow had just put them on their site that afternoon but the buyers received notice of the listing at 9:01 AM and were able to see it and make an offer before Zillow even listed it.

If you are in the market for a new home contact me and I will set up an automatic notification for you soe you can be first in line.

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Noah Curcio


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5666 Seminole Blvd Seminole, Fl 33772

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