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December 9th, 2009 10:46 AM by David W. Welch
The official numbers will come out tomorrow, but here are my estimates of how they will look. Inventory is actually up just slightly to 16,174. Since sales and the number of new contracts continue to do very well, it looks like new listings have gone up a bit. I think REO properties account for some of this since they have grown to 1,444 or almost 9% of the total. Short sales continue to account for a significant piece of the active listings and pending sales with 5,918 or 36.6% of the current inventory. The pending sales have actually gone down from their peak of around 9,000 to 8,446 with 1,603 REO's and 5,471 or 64.8% being in a short sale status. The sales completed in November were a very strong 2,250 with a median sales price of $123,000 overall. The median price varies widely between "normal", REO and short sales. Normal sales accounted for 822 or 36.5% or the closed sales with median sales price of $173,960. REO properties made up 963 or 42.8% of the sales in November with a median sales price of $83,500. Closed sales are the one category of listings that short sales lag with only 466 or 20.7% of the total closed and a median sales price of $122,000. Still only about 8.5% of the pending short sales are closing in any given month.
The Treasury Department has offered new guidelines for short sales, but similar guidelines and programs have been offered for loan modifications without much success. To be successful the banks need a bigger incentive to negotiate these deals. The Fed owns a lot of these non-producing assets, and is in a position to incentivize the loan servicers to approve the short sales. Recently, Wachovia approved a short sale in four days on a new contract I brought after they lost their first buyer. They had already been through the approval process once, and did not start all over again. There is an idea that makes sense. The net result is that we closed the transaction 20 days from the day the contract was executed. The recent TARP windfall of a couple of hundred billion dollars could be used to help fund some serious incentives for the servicers to make short sale approvals a priority. It gets houses off the market, and families in otherwise empty homes. This would also open up the short sale market to a lot of buyers that have been avoiding them because they can take so long and are somewhat unlikely to close. Getting the short sales closed that are pending right now would be a big boost to the local and state economy from a tax revenue perspective not to mention the title, mortgage and real estate professionals working on them.
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