According to a recent report by market researcher Realty
Trac, the number of closings on Short Sales was higher than the sold foreclosure
properties in 12 different states. They said this was an indication that homeowners
are finding Short Sales to be easier than they used to be and a better way out of a distressed situation
or underwater home loan. The numbers in the report may be true, but reality says we have a long
way to go when it comes to closing shorts sales in Tampa Bay.
Short Sales occur when a lender agrees to take less than
what is owed to them and allows the sale of the home to a new buyer. Short
Sales in the Tampa Bay real estate market currently represent approximately 20%
of the homes available for purchase. That number is nearly half of what it was this same time last year, but it’s not
because they were sold and closed.
Last month over 7,200 of the homes under contract were Short
Sales, but only 618 of those actually closed. Last month
there were 1,116 foreclosures pending and 458 closed. The foreclosure number may be lower
than closed short sales, but the ratio of pending to closed shows a staggering
The Realty Trac report seems to lead us to believe that
lenders’ have an increased willingness to do short sales. It looks to me that
the numbers in Tampa Bay show that we have a long way to go with lender
cooperation on Short Sale offers.
RealtyTrac says foreclosure sales still outnumber short
sales nationwide but that is not the case in the Tampa Bay area. Short sales
have outpaced foreclosures in Tampa since August of 2011. But is that because
banks are approving a lot of shorts sales in Tampa and the surrounding areas.
What it suggests is that there aren’t many foreclosures
available for sale in the Tampa Bay.
Some mortgage servicers say they started pursuing short
sales more aggressively months ago. Bank of America says it approved 107,000 short
sales last year, nearly double the amount in 2009. But if there are over 3,300 short sale homes
available in a 3 county area here, how many more are scattered across the
country. I’m afraid these numbers are very small in the grand scheme and much
needs to be done to make the process faster and more efficient.
It has been well documented that Short Sales tend to harm
neighborhoods less than foreclosures. They are usually maintained better and
typically sell for a higher price. The homeowners also have the opportunity to
get a new mortgage sooner than those who go through foreclosure. It makes
perfect sense for Banks to try to find a way to get more of them closed. Or so
you would think.
There have been new measures introduced recently that could boost
Freddie Mac and Fannie Mae will soon require lenders to
decide short sale offers within 60 days.
I guess we’ll have to see if the changes come and hope that
these types of deals start closing at a better clip. 8% isn’t going to cut it.