Last year buyers enjoyed a real estate buffet that served a combination of foreclosures/REO’s, short sales, or normal/traditional sales at historically low prices. The inital buyer consultation included an explanation of the in’s and out’s of each. Frustrated sellers knew they were competing with distressed sale pricing as they tried to obtain the highest price for their traditional sale that had seen years of declining value. It was common for most valley cities to have a majority of the sales to be distressed foreclosure or short sale transactions. Distressed sales as a percentage of total sales were above 80% for a couple of Phoenix valley cities! It was the exeception for a city to have less than 50% of total as distressed sales. The chart on the left shows the percentage of sales by each category for May 2011 for each valley city. As you know things change in real estate, so read on to see what has happened since last year.
Phoenix Arizona Short Sales and “upside down” homes.
Short sales in Phoenix, Gilbert, Chandler,Queen Creek, Scottsdale and all across the valley are taking center stage as they have become the topic of any Az real estate discussion. Many a buyer or seller that has been through a short sale transaction will undoubtedly compare it to high drama movie because of the highs and lows, a soap opera because it never ends or a nightmare due to all of the above. These discussions will continue with home prices at current levels. According to an article in the Phoenix Business Journal, First American CoreLogic Inc., estimates that 51% of the mortgaged properties in Arizona are “upside down”, also described as having negative equity, because the balance on the mortgage is more than the market value of the home. This is confirmed by the fact that in most Phoenix area towns and communities, distressed sales account for 50 – 75% of the monthly home sales. Therefore, many homeowners will need to become well informed of the various aspects of a short sale when a situation arises and they need to sell. The following are important points that must be considered: