This (above) is why, from the Minneapolis Area Association of Realtors just updated Report on Foreclosures and Short Sales.
Interesting reading, and a good news/bad news report. Bad news is foreclosures and short sales are still accounting for a sizeable chunk of market activity – this will put further pressure on prices. Good news is that the for sale inventory is dropping across the spectrum – this supply/demand ratio is still not balanced, but it is trending in the right direction.
Short sales, in my mind, are sort of the first resort for someone who must (whether due to income disruption, relocation, whatever) move, yet cannot afford to do so because they owe more than the home is worth.
It will be interesting to see how many of these potential short sales wind up as actual sales, versus those that are unsuccessful and eventually go into foreclosure. In other words, a high number of proposed short sales could be a precursor for more pain to come in the housing market.
Related posts:
- Don’t be Fooled by the New Short Sale Guidance
- Born Again: When will you be eligible for a mortgage after a foreclosure or short sale?
- Born Again: How Long Do You Have to Wait After a Short Sale, Bankruptcy, or Foreclosure?
- Short Sales: Many a Slip ‘Twixt the Cup and the Lip
- FICO: Quantifying the Damage, How Short Sales May Impact Credit Scores
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The units available for foreclosure and shorts are pretty similar while the number of June Pendings for foreclosures were very high and shorts were very low. This is why the chart shows such a dramatic difference.