Short Sales Increase as Banks Realize Their Benefits

2012 is shaping up to be a big year for short sales, and it should come as no surprise.  Nationwide, short sales peaked in the first quarter of 2009 (105,000 short sale transactions nationwide), but preliminary data indicates that 2012 could come close to those same levels.

According to a report from RealtyTrac (A Building Wave of Short Sales), foreclosures typically outnumber short sales, but the gap is closing.  And in some states, short sales actually outnumbered foreclosure sales in January 2012.  RealtyTrac says this is likely because lenders are starting to opt for short sales as an alternative to maintaining and marketing foreclosures.

Additionally, the average price of short sales is declining, representing an increase in the average discount compared to non-distressed sales.

Source: RealtyTrac

For lenders, there is still an upside to all this.  According to the RealtyTrac report, the average sale price of a foreclosure in January 2012 was $$145,597.  This was almost $30,000 below the average sale price of a short sale and 34% less than the average price of a non-distressed sale.

Some other facts and figures from the RealtyTrac report:

  • 21% – the average discount (nationwide) of a short sale compared to a non-distressed sale in Jan. 2012
  • 217 – the number of short sales in North Carolina in January 2012
  • 11.86% – the increase in short sales in North Carolina from Jan. 2011 to Jan. 2012
  • 3.46% – short sales in North Carolina as a percentage of all transactions
  • $141,183 – average sale price of a North Carolina short sale
  • 15.41% – average discount of a short sale in North Carolina
  • 492 – number of foreclosure sales in North Carolina in Jan. 2012

Additionally, from the North Carolina Mountains MLS:

  • In Buncombe County (including Asheville), the number of short sales closed year-to-date (through 8/26) was 52 in 2011 and 71 in 2012, an increase of 37%.
  • Interestingly, the average price of a closed short sale actually increased to $236,953 in 2012 from $212,937 during the same period in 2011.  This represents an increase of 11%.

It seems to safe to say that the momentum driving short sales will continue both nationwide and in the Asheville, North Carolina area.

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