Real estate Trends in Jacksonville Florida and around the State:

A new real estate “buzz word” for the year has entered our professional and is becoming to become commonplace and well understood:

“Strategic defaults”

Strategic Defaults is joining the ranks of Short Sale (who heard of the term short sale five years ago or even three years ago) pre-foreclosure sale, and the other terms that have not only defined and described our current real estate market but have become the “sale and pepper” to almost every adult cocktail party conversation in the last 18 months.

Now you will hear the term “strategically defaulting”.. almost like a new fad, like a financial planning of sorts. Homeowners are planning their default on their mortgage, like part of their financial preservation plan, and incorporating a path of traditionally paying their mortgage payments on time and in full to just not paying another payment. These homeowners have determined that continuing their path of financial obligation and responsibility does not make financial sense in a negatively impacted housing market that seems a long way of any kind of recovery. Most of these homeowners historically have great credit scores but also have pretty big balances. There seems to be question as to whether staying a few hundred thousand in the hole or ruining their credit for a few years makes financial sense and some seem to have made the decision that recovering from the credit score is less painful than the financial hole they have found themselves in.

What challenging times! I am almost afraid to see what our next “fad” will be…. Maybe the droopy pants with boxer shorts hanging out isnt so bad after all!