Tuesday, February 22, 2011

Survey: Sales of Distressed Homes increased in January

Interesting piece in CalculatedRISK today(see link below)...however, in our local market we have not seen the huge influx of distressed property as predicted. Certainly, more homes than in years past that are foreclosing and even fewer being accepted for short sale. This phenomenon highlights the incorrect public perception that banks would rather settle in a short sale situation than foreclosing.

As agents, were are finding that banks are opting for the foreclosure rather than negotiate short sale options. Usually, with outstanding second loans being left in the lurch with little to no money coming their way, the foreclosure process swiftly deals with these outstanding second and third liens and clears the title for the bank to place the home back on the market; in many cases for less than the short sale offers. I have personally seen two instances in the past six months where this has occurred.

As for additional homes coming on the market in this "shadow" inventory...it's hard to say if folks are hanging on through the end of their savings, if they are actually finding gainful employment to continue making payments or if the former stigma of foreclosure has softened and folks will let their homes go back to the bank without batting an eye. Only time will tell...

Survey: Sales of Distressed Homes increased in January

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