Short sales?
Does anyone have any statistics, anecdotes, or other information about the extent of short sales in the Seattle area? (The same about the Portland area would be a bonus). Also, any thoughts about whether short sales are or will actually be a factor in the near future?
Comments
But it doesn't take much for short-sales to spike. So many home-owners are leveraged to the hilt these days, COUNTING on appreciation to bail them out (with refis to cash out equity) that even a healthy appreciation of 3% or so would drive many people into foreclosure and/or short-sales.
In this respect (i.e. highly leveraged home-owners) the Puget Sound is no different than anywhere else in the US, and even worse than most. Some of the stats I have seen show that upwards of 25% of new Puget Sound home mortgages were of the new exotic varieties in 2006. People only get these kinds of loans because they can't really afford the property. Historically (e.g. prior to 2000) these kinds of loans were an extremely small percentage of the market (less than 2% of new mortgages).
We have been constructing a house of cards that just needs a pin-prick to come crashing down.
In Snohomish Co. it is interesting to see play out because this is occuring with an arguably solid employment base locally (high tech, Navy & suppliers, healthcare, Boeing & suppliers etc) and awfully good interest rates for mortgages. That being said, our market is showing more signs of cooling: increasing inventory outpacing sales (aborption rate), longer sale intervals, lower sales volume with month-over-month deacrease in median closed sale price for combined residential & condo's in Snohomish county (March at $359K and April at $349K)---something not reported publicly or in the local news papers. They seem fixated on the benefits of reporting the 12% YOY median price gains, not untrue, but not the complete picture.
S-Crow