THE MOSTOLLER GROUP REALTY, LLC

A Challenging Market

Escambia and Santa Rosa Counties both reflect a diverse market here in 2008. We have 3 different sections of Sellers, i.e. Original, Ivan Purchasers and Lender Rats.

The Original homeowners most likely purchased between 1965-2003. Hopefully they have updated their home with the changing era. The positive aspect is that most of these Originals will make money and are more realistic when selling their home. Some of them have taken out second mortgages (borrowed against their home) and could be stuck with not having much room to negotiate their price.

Secondly are the Ivan Purchasers who purchased between 2004-2006 when homes were at a all time High. The hurricane promoted and encouraged the inflated prices. We may not experience another high price per square foot again for some time. The sad part is that this section of homeowners are stuck for a while and some are experiencing Short Sales. Example: Mary and Joseph buy a home for $200k when the market is High. They need to sell 1 year later and the Market has dropped considerably. Their home is only worth $185k. They still owe the Bank/Lender $199k and they can barely make their payments. Short Sale is utilized when you owe the Bank more than your home is worth. It's also a way to help the Bank get most of their money before someone falls 4-5 months behind in payments creating a Foreclosure situation.

The Lender Rats are unfortunate Homeowners who feel the pain with his/her payment due to the ARM - Adjustable Rate Mortage hitting them. These people are also getting desparate. I refer to them as rats because the lenders were greedy in an unregulated test drive, and it has back fired with all of the Short Sales and Foreclosures. This is "why" the Lenders have tightened the requirements in SubPrime Lending.