In 2010, expect short sales to be even more mainstreamed than 2009. What a change in 2009! According to the AZ Republic and real-estate analyst Mike Orr, “pending short sales, including all of the deals under contract, reached 9,343 in October, compared with 1,448 in January. Almost 40 percent of the homes currently for sale in the Phoenix area are properties homeowners are trying to sell to avoid foreclosure.”
Short Sales are expected to rise in 2010 while foreclosures are on the decline. The chart below shows a slight increase in short sales toward the end of 2009 while REO sales are slightly down.
Total Single Family Home Sales
Less than $399,999
$400,000 and above
REO sales and % of total sales
Short Sales and % of total sales
In terms of negotiations, most short sales are averaging less than 3 months to get a decision, whereas some banks will respond more quickly and others take even longer. The federal government has been incenting banks for over six months to close short sales, similar to the monies the banks were receiving for homes that were foreclosed.
As we enter this new year and an expected increase of distressed homes, we need to put our faith in the banks to help close more short sales and loan modifications. More short sales and less foreclosures will help our market rebound more quickly.