Here in the lovely "Wine Country" of Sonoma County, Caliornia, we finished off 2012 with over 6,100 Sales for the year with 42% being "Distressed Sales". For the first time since we've been tracking the Distressed Marketplace, Short-Sales (sales where the Seller owes MORE than the property is worth) exceeded the number of Bank Owned/Foreclosed upon homes (also known as REO's--real estate owned). Short-Sales accounted for 1,474 of our yearly sales with REO's bringing up the rear at 1078 or a total of both of 41.82%.
We've done a "flip" (no pun intented!) of % as in the past during the big REO days we had 60 to 70% of all sales being Distressed. This really beat up our mid-range because these "Sellers" never bought anything when the deal was done. You could argue that ALL the money, be it a Short-Sale or REO, LEFT our County.
However, in the last six months of this year the market exploded spurred on by 70 year low Interest Rates and a perception that the market was on the MOVE UP. Amen to both of those assumptions as they are true. We bottomed out in Sonoma County back in 2009. It just took the wary consumer and investor a bit of time to swallow that concept. The good news also regarding the "Distressed Market" is in the last half of 2012 total sales of Distressed Properties dropped to 36% of total sales.
What happened? REO's are on the wane--disappearing. The big banks are selling them off in blocks to investor groups and non-profits. The big AG settlement with 49 of our states Attorneys General indicated MORE loan mods, Less foreclosing and MORE Short-Sales. So next year? How about 250,000 MORE short sales in the nation. More loan mods, LESS foreclosures hitting the market.
The HOMEOWNER with Equity is back! Yeah! And long may they rein. Check out the chart below and for information on how to get the MOST money when SELLING your House--give the Kelly-Norman Team a call at: 707-799-3617.
Note the "Hey-day" of REO's or Bank Owned Property back in 2009. They've dropped 50% while Short-Sales have increased 40%. What would be a normal maket for the Distressed Property as a percentage of total sales in the market? How about 5-10%!!