A report from RealtyTrac® (), the nation’s leading source for comprehensive housing data, shows that short sales have fallen out of favor with lenders as the values of the homes that are in distress or foreclosure continues to rise. From the RealtyTrac® report -
Inventory shortages are part of the picture — last week Lender Processing Services reported that after 18 straight months of declines, U.S. foreclosure inventory is now at its lowest point since the end of 2008, falling nearly 30 percent from a year ago to 1.28 million in October.
The RealtyTrac® report shows that short sales represented 5.3 percent of all sales in October, down from 6.3 percent in September and 11.2 percent at the same time a year ago.
Foreclosure auction sales to third parties (a new category, separated out in the report for the first time) represented 2.5 percent of all sales, down from 2.8 percent in September but nearly twice the 1.3 percent seen at the same time a year ago.
Sales of “real estate owned” (REO) homes repossessed by banks accounted for 9.6 percent of October sales, up from 8.9 percent in September and 9.4 percent a year ago.
While it is still possible to do a short sale, more and more lenders would prefer to just take the house back and auction it off themselves to cash buyers. It is also quitter possible that homeowners who think that they are still under water on their mortgages are wrong about that. Values have come back so strong and so fast that the majority of homeowners can at least break even on a sale now. If you haven’t had an updated Market Analysis done by a real estate professional in the last 3-6 months you are out of date on your home’s value.
Locally, we were at about 50% of all sales being distressed sales for much of the last three years. Now, distressed sales in most markets locally are in the low teens or even below 10% in some. That’s good news. The biggest issue that we face today is the lack of inventory – not enough houses for sale. A part of that problem is the misunderstanding by homeowners about their home’s current value. So call your local Realtor® and get yourself up to date on your house. You may be pleasantly surprised.
To read the entire RealtyTrac® story about the falling short sales and the shift in the market towards foreclosures again click here.