RealtyTrac is a large database company in the real estate business. They track things like home sales in all 50 states and whether those sales were foreclosures or short sales or normal, non-distressed sales. Recently RealtyTrac reported that foreclosures are down significantly across the board; however, there are still areas of the country with fairly significant foreclosure rates.
I am happy to report that Michigan did not make their top-10 list of states with lingering foreclosure problems. The top five were
- Florida: 1 in every 392 housing units received a foreclosure filing in November (down 23% from a year ago)
- Delaware: 1 in every 480 housing units (up 141% from a year ago)
- Maryland: 1 in every 618 housing units (up 42% from a year ago)
- South Carolina: 1 in every 660 housing units
- Illinois: 1 in every 700 housing units
Rounding out the top 10 are Ohio, Connecticut, Nevada, Iowa and Utah.
In the data that I collect and share every week the distressed homes sales became such a small part of overall sales that I stopped reporting it as a statistic. The data that my company - Real Estate One - collects and shares also shows a significant drop-off in the foreclosure and short sales rates. That’s good news.
Distressed sales, especially foreclosures, depressed the market and devalued entire neighborhoods. Many foreclosed homes were either stripped by disgruntled owners on their way out or vandalized by metal thieves. In the summer many had unkept yards and now they have driveways and porches that are snow covered and uninviting. I don’t know why some lenders haven’t learned yet that keeping up the foreclosed properties on their books will get them the maximum value for the asset.
Short sales have practically dried up in Michigan and I suspect elsewhere as lenders chose to just go ahead with foreclosure if they couldn't arrange a refinance package with the owners. Short sales were always a pain and usually took 4-6 months to complete. I, for one, am not sad to see them go.
So, right now; the hot topic of conversation in real estate in Michigan is not about distressed sales; it’s about lack of inventory and rapidly rising prices. Builders are throwing up new homes as fast as they can (maybe there’s a red flag in that statement somewhere) and resale homes in good condition and priced properly are selling in a matter of days or weeks, rather than months. That’s good if you’re a seller; but, not so good if you’re a buyer. Buyers need to be prepared to act quickly by making a good offer (sometimes above the asking price) on any house that they find and like.
I still get requests from would-be buyers to find them a great deal on a foreclosed or short sale house. I have to tell them “that boat already sailed.” You may still be able to find a home that needs some work and thus has a price to reflect its condition; but, finding that $300,000 jewel laying in the $100,000 weeds is a thing of the past. Get over it and move on. Let's look for that house that's priced at $160,000, but which could be worth $200,000 if you put some work into it.