Short sale stigma may helps home buyers
Although housing prices are rising nationwide in most markets, real estate professionals say the rise in the number of short sales give buyers an opportunity to catch some last-minute bargains.
Short sales — where the sale price of a home is below the combined total of outstanding mortgage on the property — accounted for 14% of all residential sales in June, up from 8% a year ago, according to data released Thursday by real-estate data firm RealtyTrac. (RealtyTrac, which typically traces foreclosure rates, released the data its U.S. Residential Sales Report.) While the national median house price was $168,000 in June, up 3% from the previous month, the median price of a distressed home was $120,000 according to RealtyTrac.
Of course, states with the highest percentage of short sales in June included those that were hardest hit by the 2008 recession and property crash. Those states include Nevada (which makes up 30% of all short sales), Florida (29%), Maryland (21%), Tennessee (19%), and Arizona (19%). In fact, short sales accounted for 23% of all house sales in June, the study found.
Listing a house as a short sale lowers the price: good for the buyer and sometimes good for the seller, who is able to sell the property with the permission of the bank. And short sales can go for up to a 26% discount, according to Lender Processing Services in Jacksonville, Fla., a company that tracks mortgage performance. However, properties labeled “not short sale” were snapped up 10% to 15% faster than non-distressed homes, according to a study of 5,000 home sales in Boca Raton by researchers at The University of Southern Mississippi and Florida International University
Properties being sold as short sales — rather than foreclosures — tend to be in better shape, real estate professionals say.
However, some experts say that short sales are drying up fast as the housing market recovers.The peak was about 20% in the early part of 2012. The National Association of Realtors, which represents the industry, estimates that short sales are now closer to 8% of the total market share.