Focus On Short Sales

You know, there's just nothing to get you into the Christmas spirit better than talking about short sales. Assuming that you are the Grinch or Ebeneezer Scrooge... But here we are anyway. Never let it be said that Dennis Trimble let a holiday get in the way of a perfectly good funk.

I've been saying for several months now that I expect that we'll see short sales increasing their share of our market. So far that change has been slower coming than I expected. I still think we're going to see a change, and I'm a little bit perplexed about why we aren't seeing more of these than we are right now. Where are we right now? Let's go to the scoreboard:

Short sales account for 34.6% of our active listings, 89.5% of our contingent listings, 15.8% of our pending sales, and 25% of our sales for the past three months. All of those numbers except for the pending sales is up noticeably since I last reported on this segment in August. But with that pending percentage down, it probably portends a lower level of these as a percentage of sales a couple of months from now.

Success rates have been pretty stable. We remain at a 47% success rate for short sales, which is unchanged from August. I'm not sure if that will improve, or if we've reached a point where things have peaked in that regard. Some of it will have to do with simple supply and demand. If there are enough available non-short sale listings out there, buyers will most likely go to those first. If that inventory dries up, however, buyers will pretty much have to be looking seriously at these. I do think there is still some progress to be made in our industry, both by agents and lenders. There has been some slow progress made so far, and things have improved incrementally, but we still have some work to do.

We still have an enormous negative equity problem in our market, and that's not going away for a long time. We could see a big spike in employment and incomes locally, which would help drive prices up. But don't hold your breath - the most likely way out of this hole is via short sales. It seems to me an inevitability that we're going to start seeing more short sales sooner or later. I guess it might be coming later than I originally thought.