What Is Happening With Short Sales?
II have been saying, “Short Sale is the way to go”. It is less costly then foreclosure in the long run for the banks and less humilliating for the homeowner.It is the better of the two evils during this ravishing recession.
Source:(KCM May 2012)
It seems that the banks have finally realized that a short sale is a better option than foreclosure for them, the homeowner and the neighborhood. It is for this reason we believe that 2012 will come to be known as the year of the short sale. CNN Money reported on this exact point:
“We believe 2012 could be a record year for short sales,” said Daren Blomquist, vice president at RealtyTrac.
Banks are showing signs of being more open and willing to approve the deals — even if it means accepting less money. The average sales price for a short sale was $174,120 in January, down 4% from December and 10% year-over-year.
Market Watch also addressed the short sale situation recently:
Fitch expects the increase in short sales to continue because of the potential benefits afforded to both lenders and borrowers. Some borrowers may prefer short sales because, though they cannot stay in the property, they often walk away with cash incentives from lenders and healthier credit reports unmarred by foreclosure. For lenders, short sales provide a more efficient and cheaper alternative to the increasingly lengthy and costly foreclosure process.
Why Are the Banks Now Leaning Towards Short Sales?
The simple answer is that the banks lose less money when doing a short sale. The CNN Money article mentioned above explains:
Typically, banks get about 20% less for a foreclosed home. Foreclosure can also take years to unload, during which expenses, like property taxes, insurance and other expenses, mount up.
The Market Watch report breaks it down further:
Short sales…are currently getting completed 20 months after the last payment made on the loan, approximately 10 months less than the average time to foreclose. Shorter timelines reduce lenders’ carrying costs (i.e. accrued loan interest and property taxes, insurance, and maintenance) and eliminate most of the legal expenses associated with foreclosure and liquidation. As a result, loss severities tend to be considerably lower. Historically, for loans with similar attributes, short sales have severities 10%-15% less than REO sales. As the proportion of short sales increases, we expect average loss severities to improve further.
How Many Short Sales Could Be Completed?
JPMorgan has projected that over 500,000 short sales will be done this year. Also, NECN.com recently reported:
RealtyTrac estimates that if the January numbers it found hold up, there would be about 105,000 “pre-foreclosure” sales of homes, most of them short sales, during the first quarter of this year, and at that rate something like 400,000 for the year.
How Long Will Short Sales Be a Major Part of the Market?
The NECN article shows us that short sales are here to stay for some time.
According to the Mortgage Bankers Association, there are nearly 3.5 million homeowners delinquent on their mortgages by at least one month, including 1.5 million who are 90 days or more behind on paying their mortgage. And there are 12.5 million homeowners still who are “underwater,” owing more on their mortgage than their home is worth. That suggests that at the current rates, barring some spectacular economic recovery, it would take years, even decades, for short sales alone to clean up the mortgage mess that remains.
Short sales are here to stay. We must accept this fact and work hard to learn the process and apply it where it makes sense.
read moreThe Mortgage Industry is Changing Again!
I have previously been the president of Landis Mortgage Financing, Inc. for 28 years. Unfortunately, I have seen many uninformed borrowers given information that was not in their best interest. Hence, they were allowed to exend their credit way beyond safe limits.
This recession has impacted many responsible consumers. Now these new proposed QM standards threaten to penalize these very same browers who are trying to reinstate their credit. Read below!
Source: (KCM Blog May 2012)
We often discuss the difference between the PRICE and the COST of a home. We want buyers to realize, in many ways, the cost of a home is more important to them than the actual price. Obviously, price is part of the cost equation. The other piece, available financing, is also crucial. Soon, there will be major decisions finalized by the government regarding house financing moving forward. These decisions could negatively impact many buyers.
Mobile Technology Is IT!
A ccording to Rismedia.com: (May 5, 2012)
“As smartphones and tablets continue to be employed for every conceivable service, mobile customers are demanding fastand reliable ways to access information in the real
estate industry. . . .
‘Our research shows that nearly all homebuyers who used a mobile device in their search process consider it a valuable tool. Homebuyers are becoming more fast-paced, and require technology that can keep up with them. Our mobile platforms are streamlined and efficient, and they provide instant access to valuable information. With a few finger swipes, a homebuyer can see extensive details about a home, as well as find out exactly how to contact the advertiser,’ says Scott Dixon, president of NCI’s Real Estate Division, who offers the following tips for harnessing mobile shoppers:
1. Fill in the Blanks. A majority (68 percent) of mobile shoppers shared details such as prices, locations, amenities, and photos of potential homes. The best way to capitalize on this trend is to be complete when filling out profiles, and optimize on a homebuyer’s want for information.
2. Keep it Simple. The peak traffic for mobile searches occurs from Friday to Sunday, when people are on the go. Knowing that, it follows that a mobile platform must be kept simple and easy to use, something that can provide a shopper with information they need in an instant.
March 2012 Statewide Residential Market Activity
Pursuant to the Florida Realtor Association, the statistics for the Florida Statewide Residential Market Activity has been posted.
Click here for report.
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Did You Say . . . “Multiple Bids On My Property?”
In some markets, Real Estate sales associates are experiencing low inventories and multiple bids!
According to Bloomberg, “A residential comeback would provide a boost to the U.S. economy. Housing will ‘contribute modestly’ to the economy this year for the first time since 2005, according to Peter de Bruin, an economist at ABN Amro Group Economics in Amsterdam.
If this is a buyer’s market, then why are we experiencing a shortage of homes?
Rising demand for homes has cut into the supply, which is already low because many sellers — especially those with negative equity — are waiting for prices to increase before
putting properties on the market.
According to the National Association of Realtors®, about 2.43 million existing homes were listed for sale in February, the fewest for the month since 2005, the year U.S. home sales reached a record 7.08 million. The number of listings rose by 100,000 from January, a seasonal bump that occurred every February since 2000 except for 2008.
The February supply of unsold homes listed for sale was down almost 50 percent from a year earlier in markets such as Miami, Phoenix and Oakland, California, according to Realtor.com.
The Miami Association of Realtors® reported that single-family home prices in the Miami area increased 19 percent from a year earlier to a median $175,000 in February, the third consecutive year-over-year increase.
“The number of listings fell to 5,061 in February, or about six months’ supply, down from a nine-month supply a year earlier, as foreign buyers joined out-of-staters and Floridians seeking to take advantage of low prices,” said Ron Shuffield, president of EWM Realtors® International.
Better Housing Affortabilty for the 4 Q 2011
According to FloridaRealtors.org, due to lower interest rates and lower housing prices sales rose and inventories declined in quarter 4 of 2011. Read full article below . . . .
NAR: 4Q sales up, prices slightly lower
WASHINGTON – Feb. 9, 2012 – Housing affordability improved in most metropolitan areas thanks to softer existing-home prices and record-low mortgage interest rates in the fourth quarter. Rising sales and lower inventories resulted in a better balance overall, according to the latest quarterly report by the National Association of Realtors® (NAR).The median existing single-family home price rose in 29 out of 149 metropolitan statistical areas (MSAs) in the fourth quarter from a year earlier; two were unchanged and 118 areas had price declines.“Sales have risen strongly in lower price ranges from one year ago, while sales at the upper end remain sluggish,” says Lawrence Yun, NAR chief economist. “More importantly, we’re seeing a consistent trend of declining inventory, which means supply and demand conditions are becoming more balanced in more areas, which will help stabilize home prices.”The national median existing single-family home price was $163,500 in the fourth quarter, down 4.2 percent from $170,600 in the fourth quarter of 2010. The median is where half sold for more and half sold for less. Distressed homes – foreclosures and short sales that sold at discounts averaging 15 to 20 percent – accounted for 30 percent of fourth quarter sales; they were 34 percent of sales one year earlier.
read moreFind Your Personal Paradise,1490 Sheridan Street, Apt. 8A, Hollywood, FL. 33020
This is the largest 2 bedroom condominium with 2 full bathrooms on the 1st floor with a wrap around screened porch. The unit has a new air conditioning unit and newer appliances.
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Improving Housing Markets
Iwas reading this very important article on FloridaRealtors.Org
WASHINGTON – Jan. 10, 2012 – The number of housing markets showing measurable improvement nearly doubled in January with the addition of 40 new metros to the National Association of Home Builders/First American Improving Markets Index (IMI). The IMI now shows 76 improving markets, up from 41 in December, with 31 states and the District of Columbia represented by at least one entry.
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