For the last year or longer, foreclosure inventory of active bank owned homes for sale Valley-wide (not including Desert Hot Springs and Coachella) has hovered around 550-575 listings. In the last six months inventory was pretty steady at roughly 350, more recently inventory hovered around 250 and now this week it is at 164 (188 two weeks ago). This is definitely a declining trend. See below.
As Bank Owned, Foreclosure Inventory reduces, we continue to see more and more of an increase in inventory of Short Sale Properties. Now, with a new Federal Program, H.A.F.A., we will see a streamlining and shortening of the short sale process, with homes preapproved for a short sale before they are listed, and approved at the asking price. The goal is for the banks to have as high a success rate as they do in closing bank owned, foreclosed homes, which is at about 85-90% successful closing ratio, for short sales, which roughly a year ago were running about 10-15% in successful closings, and about 30-40% in the last six months, currently have improved to perhaps 60-80% in successful closings. We expected to see strong inventory here, HOWEVER.............
As the season progresses, there is no question that inventory overall is declining. Why? Well, many homeowners are upside down. They owe the bank more than what their home is worth. Can they sell their home as a short sale? Well, yes and no. The homeowner would need to apply with the mortgage company. One of the initial steps in the approval of a short sale is that the seller must show finanical hardship. Not everyone is approved and homeowners end up unable to sell without paying out of pocket to make up the difference. The result?.......less homes for sale.
This would explain the latest trend of seeing a decline in short sale listings as well. In addition, with less foreclosures on the market, buyers are beginning to see the value of purchasing a short sale. As demand increases, inventory decreases. See the Inventory Summary below.
Be sure and check the DAILY HOT LINKS FOR ALL BARGAIN LISTINGS AS WELL AS THE SHORT SALES BY MAP WEBPAGE!
With reduced inventory, especially in the lower price ranges, expect multiple offers and a selling price that usually ends up higher than the asking price. Be prepared with a prequalification letter from your lender and verification of funds to close so we can submit that with any offers.
INVENTORY SUMMARY: These are Active "For Sale" Listings only and include Palm Springs, Cathedral City, Rancho Mirage, Palm Desert, Indian Wells, Bermuda Dunes, La Quinta and Indio.
Read the rest of our "New Listings - "Fixers, Bargains, Foreclosures, Bank Owned Properties and Short Sales 5/9/12" newsletter.