The slump in the US housing market may not be over, but for buyers like Daniel and Robin Akerman, for sale signs equal dollar signs.
For US$150,000 - the Akermans are buying a three bedroom house in Pensacola, Florida which sold for US$225,000 at the peak of the market. The house needs some repairs, but the Akermans still think it's a deal.
"We're getting a lot of house. We looked at a lot of houses before this one, and they were good prices but not as much house. Definitely excellent house for the price that we're paying," says Daniel Akerman.
Short sales like this are increasingly popular in Pensacola, Florida. Under a short sale, the bank agrees to forgive some if not all of a borrower's debt even though the home owner sells the home at a loss.
Coldwell Banker realtor Deborah Mays says that 1/3 of her business is now coming from short sales.
"The biggest thing that people have to keep in mind is that it is going to be a process, they have to have patience. It could take anywhere from 3 months to 6 months, to 11 months. Depends on the bank, seller, the package a whole lot of conditions going on," said Mays.
The average home price in Pensacola is US$178,000 that's down 20 percent from the peak of the market in 2006. Realtors here say the best thing going for the area is that it hasn't been hit as hard by the housing slump as southern Florida.
Short sales aren't an option for everyone though. Mitchell Perry, a member of the US Navy stationed in Pensacola, bought his home at the peak of the market for $115,000. The house is now worth US$90,000 and Perry is being transferred to a new base. Compounding matters, Perry refinanced his house, without realising that his mortgage would rise to US$125,000.
"There's no selling right now, it's either going to be rent or it's going to be vacant and I'm going to be paying on it," says Mitchell Perry, US Navy hospital corpsman.
Denis McKinnon, of Coldwell Banker, says that he sees many situations like Perry's.
"Today's market place, typically you can't rent and make enough money to overcome your debt service on it."
McKinnon says that property prices in the area have become relatively stable. So while many continue to wait out the slump, those that are ready to jump in like the Akermans, are finding it’s the right time to buy a home.
Reuters