Home Sale Relief

Dr. Housing Bubble has a great post about the state of short sales and foreclosures these days:

We can do a 12 days of Christmas list of all the negative news coming out but we’ll branch off and focus on the short sales here in Southern California. It is now the 21^st week since I started tracking short sales that the list has increased each and every week. Inventory is holding at a steady number but the percentage of short sales to overall inventory is increasing. When I started looking at the numbers in July, short sales made up roughly 3.35 percent of the entire inventory. Now, short sales are up to 7.64 percent of the entire inventory in Southern California. A doubling in only five months. Take a look at the chart below:

Head over there right now to read the whole post. It is very illuminating…the economic bad news and the crazy stock market and what these economic events mean to you.

The fact that in Southern California short sales are doubling means this: that if you own a home and are trying to sell,  you are competing with people who don’t care what they sell their house for.

Because when you are doing your own short sale, you will get none of the money from the sale. The mortgage lender gets it all. Whatever is left after paying closing costs and real estate agent commission. So you do not care about price.

In fact most short sales are done at maybe 75% - 85% of market value. Below market. And what does each short sale do to housing prices in the neighborhood? Of course, each comparable sale that actually gets closed represents a new benchmark. And this benchmark from a short sale is quite a bit lower than a normal sale.

If you want to find out more, read my article about  Short sale: How to sell your house in nine days when there are no buyers

Short sales are a form of forced sale. A forced sale could be an auction, foreclosure or short sale. And a forced sale produces a new comp that will drive all the home prices down.

Short sales doubling in only a matter of months is very bad news for valuations. I would suggest you hop over to http://www.HomeSaleRelief.com and take my 20 minute free instant course on short sales, load modifications, avoiding foreclosure,  slashing your debts without bankruptcy and even buying a new house with no money down and bad credit.