I haven't seen as many rentals on the market lately either (at least where I live). So I am beginning to wonder if low supply will put upward pressure on rents, which will further facilitate market normalization (rents go up, and home prices go down...eventually finding an equilibrium point between the two adjustments).
Of course the elephant in the room is distressed inventory......which should continue to hit the market now that the Alt-A and Option ARM is starting to implode. I have started skimming Mr. Mortgage's blog. He has some disturbing predictions for what's to come.
Zips are sorted from high to low, month's inventory. Sales is from DataQuick courtesy of the SacBee, and inventory was collected for SFH resales from ZipRealty.
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WOW, the market average below 6 months, including short sale listings.
I figured this post would make your day.
Personally I am glad to see it too. The local economy needs a stable and affordable housing sector.
What's interesting to me is how much the prices are being cut, even in not-bad neighborhoods. Since I'm not in the market to buy, I don't follow prices as closely as you all do, but one that was foreclosed in my neighborhood sold for more than $130K less than the previous owner's mortgage and $80-100K less than neighboring houses. It was in pretty good shape, too.
With regard to the Alt-A and Option Arm loans, I can tell you at least from the prospective sellers that I am speaking with - there are a lot of folks NOT currently in default who have these loans who are attempting to do short sales right and loan modifications now (rather than wait until their loan changes for the worse in 0-3 years).
The ones who are unsuccessful at negotiating the loan mods are the homes I am listing...from the people I speak to, about 50% are able to do a loan mod that permanently modifies their loan by debt reduction or fixing the rate.
ALL of my listings right now are short sales, and half are Alt-A or Option ARMs that are trying to preemptively get this handled.
I will be curious to see in a year or so how many of these loans are left un-modified and un-foreclosed.
The problem I have with short sales, is they mostly clog the market artificially with homes priced so low that the lender won't approve, making the market appear worse than it is.
The sales stats of short sales prove this out, it is the lowest performing segmemt of the market.
I like that MLS now makes agents label the type, REO, short.. Its time for more regulation. In fact, they should have a big gold star for "properly emcumbered"
I agree with you sippn. That was a much needed MLS change and most agents are abiding by the rules. It is a self-governing process, so if I discover a mis-labeled short sale, can report it and MLS will contact the agent and require they make changes. Short sales are an interesting animal in general. I have successfully negotiated and closed 3 of them this year and am working on others. Many agents will price their SS listings artificially low to attract attention...that is a bad strategy for short sales.
The owner tried a short sale on the place I mentioned above--for $309K. It was foreclosed and ended up selling for $234K. I don't think it got any offers at $309 however.
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