Here is an interesting news story from KABC Channel 7 regarding short sales and the Southern California housing market.
(KABC) — Taking a look at the local housing market and what we can expect in the new year, there will likely be a spike in foreclosures. But that could be offset by short sales becoming easier.
Susan Varley, owner of Real Pros Real Estate in Corona, is showing a house for sale that was once a foreclosure. Believe it or not, it is somewhat of a rarity. For the past several months, foreclosures all but dried up, even in the Inland Empire.
“The truth is, there’s not a lot of foreclosures right now,” said Varley.
But in 2011, that’s expected to change.
This now-remodeled house will likely face more competition. Banks had a moratorium on foreclosures, especially during the holidays.
But this year, some experts believe banks will release more foreclosures into the housing market.
Varley doesn’t think that will change things much in Southern California.
“I think we will see an increase in foreclosures, but I don’t know if a dramatic enough increase to really impact our market,” said Varley.
What happens with foreclosures in 2011 may be dependent on what happens with “short sales.” Short sales are when a home is sold for less than the property owner owes on it. In the past, the banks have taken quite a bit of time to do a short sale. But that’s about to change.
“The banks are getting a better handle on the short-sale process, and the time frames are speeding up quite a bit,” said realtor Mike Belger. “This property we’re standing in right now has been on the market with a short-sale negotiator about three and a half months, and we just actually got a full approval today on it.”
Even though short sales like on this Corona condominium are 40 to 50 percent of the Inland Empire market, it used to take six to nine months or longer to complete a short sale, and that was not good for most buyers.
“You waited nine months. By the time you got your approval, the buyer was gone or had bought something else,” said Belger.
But with faster short sales and more inventory at good prices, 2011 is looking up.
“I wouldn’t call it a banner year, but I expect it to get better than it was last year,” said Belger. “2011 will be better than 2010.”
(Copyright ©2011 KABC-TV/DT. All Rights Reserved.)