Focus On Short Sales

We're back around to taking a look at short sale activity in our market today. It's been a few months since I've reported on this segment of our market, and I really shouldn't let it go that long. Bad Dennis! Bad!

If you've been looking at the various area reports that I've been doing, you'll see that every area has a little variation, but short sales are accounting for a lot of the activity in most areas of our market. Because we had so many homes sold at or around the peak of the market, and many more were refinanced in that time frame, we have a lot of folks out there with homes that have more debt than market value. Not all of them need to sell, and that's good.

But some of them do need to sell. That's what we're talking about today. As of this morning, short sales account for 46.1% of our combined active and contingent listings. This has been right around that level for a couple of years, so that's not surprising. The mix is reasonably close to where it was when I last reported on these numbers in September - 29.3% of our active listings and 80% of our contingent listings are short sales.

Looking at sales activity, 24.3% of our pending sales are short sales. That number had dropped off to 15% a few months ago but now it's back where it was in May. Short sales accounted for 14.7% of our sold units in the last three months. This is back up from a dip in September, and in line with the 14% that we've seen over the past year.

The success rate of short sale listings continues to be pretty stable. 32.2% of the resolved short sale listings (not counting listings that are currently active or pending) that came on the market over the past 15 months were sold. That compares to 71.4% for the market as a whole. They're still harder to get done, and quite frankly, some of them never have a chance for one reason or another. But we're making progress.

Looking ahead, there appears to be some progress on lenders getting some guidelines together that will help make this process a little more viable. The government came out with some guidelines that may or may not be adopted by lenders, but the trend right now seems to be positive, and I would expect that we'll see better success for these types of transactions over the next year or so, and they'll start to comprise a larger part of our market. Which is good, because until we start to see more homeowners with equity, we're going to have short sales. And that might be a while - maybe several years.