Foreclosures To Surge in Spring Isle

Spring Isle is the one neighborhood along the Avalon strip that catches my eye the most. Something is working in this east metro Orlando neighborhood. I like the fresh, crisp look of the community – the homes, common area and recreation facilities. I attribute this to effective HOA management. Now, no one is a fan of HOAs, but this neighborhood truly stands out compared to the numerous neighboring communities up and down the Avalon strip. Spring Isle actually enforces common sense rules/regs such as no overnight street parking and no commercial signage. These things make a world of difference to the image of a community and for Spring Isle, it works.

Though still a neighborhood with active construction, the majority of Spring Isle came of age during the Orlando housing boom starting in 2005. Many buyers at that time (owner-occupied as well as investors) bought with easy-to-qualify financing and are now heading down the path to foreclosure:

- For active listings in the Multiple Listing Service (MLS), 50% are short sales or bank owned (8 of 14 single family homes and 7 of 16 townhomes). active

- For pending listings in MLS, 60% are short sales or bank owned (3 of 7 single family homes and 3 of 3 townhomes). These sales are anticipated to close Jun/Jul. pending

For a community of this size (567 homes as of this writing), there were minimal sales over the past 90 days - just six sales in MLS. Four of these sales were builder sales, plus two other single family home sales were short sales or bank owned. sold

A couple things are brewing here – overpriced homes and an avalanche of new foreclosures about to occur in Spring Isle.

Overpriced Homes For active listings as of today, 50% are listed at prices that just don’t make sense for the market. These homes are overpriced, can’t be getting any showings and will not sell. It appears that these listing prices are based on the seller’s purchase price, not priced according to market. These overpriced homes will remain on the market for many more months to come and will require substantial price reductions to even be considered for purchase by an informed buyer. Regardless of the seller’s purchase price, the home is only “worth what it’s worth”.

Avalanche of New Foreclosures Numerous Spring Isle homeowners who bought at the peak starting in 2005 and now need/want to sell, but are unable to make a profit (or even get their money out) are seeking “short sale” approval from their lender. In fact, 50% of active listings today are short sales. Remember, it is the lender who approves or denies a short sale, not the homeowner. Homeowners who are denied short sale approval by their lender will ultimately be foreclosed on. What this means is more and more Spring Isle homes on the market that are bank owned, not privately owned. And no one has more incentive to negotiate and sell low/sell now than a bank. Banks don’t want to own real estate – they are not in business for that purpose.

Curious about homes that didn’t sell for one reason or another? expired

Moral of this story: a home will only sell when priced according to market.