When the pandemic hit, we all tried to figure out what would happen to the markets. 

The stock market went down on Mar 20, 2020, to around 19000, but promptly went back to the 25000’s and we were all in awe.  Who saw that coming?  Instead of the predicted 22 million unemployed it came in at only 20 million.  Since then, the market has hit 31,000. 

The real estate market moved along at the beginning of the pandemic using pre pandemic comps and stayed flat.  Mortgage brokers, Realtors, appraisers, buyers, and sellers proceeded as if things were normal, and transactions continued.

In Florida, we saw strong demand from buyers including many getting away from the cities, the pandemic, and the protests. 

The governor put a moratorium on foreclosures and evictions which expired, but President Biden has issued an executive order against evictions and foreclosures.

The numbers of people who are behind on their mortgages and rents have been reported at different times at different amounts.  A more recent guestimate suggested that there are around 12 million people that are behind.    

As far as foreclosures, this data is not being reported because these numbers are hidden by lenders giving late payers a forbearance.   Those in forbearance are not having foreclosures filed.  In fact these numbers are completely hidden.

The recent extension of the foreclosure moratorium only applies to FHA and VA loans.  That means that FNMA and Freddy Mac loans are subject to foreclosure, these are the conventional mortgages.  And more importantly, this is where the landlords go to get loans.  Landlords have been hard hit by the eviction moratorium.   Foreclosure of these loans could have started in the last few weeks, yet we are not seeing them reported.

The pandemic has had a strong effect on supply, or should we say the lack of supply.  Homeowners who might have sold because of life events, have not been selling as much as in the past.  They do not want to move during a pandemic.  They do not want to go through the selling process, they do not want strangers/buyers walking through their house. 

Therefor we are not seeing supply from regular sellers.  We are not seeing supply from foreclosures; we are not seeing turn over from landlords. No short sales, no pre foreclosures.

How imbalanced is the supply and demand for real estate in Pasco County?  For comparison over the last 10 years or so, Pasco has had around 4500 to 5000 residential properties available, of those we usually had 1000 or 1500 homes under contract meaning there were around 2500-3000 homes to choose from.   Today, April 6, 2021 there are 2899 homes, 2215  of them have a contract leaving only 684 residential properties available.  Only 415 of them are single family residences.  In March  there were 1550  residential properties sold.  That was a big jump from February's 1109.

The net effect is that prices have been strong.  Who saw that coming at the beginning of the pandemic?  What can we expect from here?

The narrative in the press regarding real estate has not given a clear picture.  Lawrence Yuen, chief economist for the Florida Realtor’s predicted  a 4% rise in prices in Florida for 2020, the numbers were closer to a 15% rise. 

The Federal government has pumped $2 trillion into the economy and has just passed a bill to add another $1.9 trillion.  This combined with the moratorium and low interest rates has had a huge effect in helping avoid a stock and real estate collapse.

Since February 7, 2020, there have only been a handful of foreclosures filed in Pasco County.    Very few of them have been mortgage foreclosures.   

Many of the homes that are in arrears have been given a furlough on making payments.  This means that these mortgages are not even on the list of future foreclosures.  These homeowners will be required to make up the arrears at some point or have the arrears added as principal to their loan.  If they cannot make up the arrears or add the arrears to the principal, they will be subject to foreclosure.  All these mortgages have had the same time frame for furlough, and it stands to reason that they will all default at the same time and become foreclosures around the same time.

When the moratorium ends, the foreclosures will be trackable in real time.  That means we will be able to monitor foreclosure filings within one hour of being submitted.    Each day we will count them.  Each week we will total them and each month they will be tabulated.

The narrative in the press will start to pick it up.    Have you noticed how the press focuses on unemployment numbers, seeming to be more sensational when they are bad?   This type of focus and press will be our future as a foreclosure bubble approaches.  

It can take 5 months and more for a foreclosure to become part of the supply chain.  So, this inventory is a long way off.  We will see pre foreclosures, short sales, and evictions first. 

What else can we expect? 

As the press reports the mounting foreclosure statistics, you can imagine the conversations.  “Honey, it looks like there will be a lot of foreclosures, maybe we should sell our house before they come.”

Buyers will suddenly be aware that the current inventory is going to expand.   The competition for homes will diminish as expectations of a large future inventory becomes prevalent.  

Suddenly, sellers will become concerned that their home may not sell.  As this concern mounts and the supply of real estate expands it is hard to imagine that prices will stay firm.

Should you sell your unnecessary real estate?   Do you have real estate that, if the market corrected 30-40% you will have wished you sold?

Call me, Randy Jenkins, and my team to discuss.

Randal Jenkins Bill Sanders  Sarah Baker          FloridaRealEstateFamily.com



Read about the challenges for FHA Buyers  409home.com/FHA

Need a mortgage for a refinance or purchase.  Call me Randal Jenkins, Mortgage Loan Originator for Rocket Mortgage, NMLS # 205-3417.

Randy   727-409-4663  


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