2010 Sonoma County Foreclosures and Short Sales

Just the Facts: In 2010 there were 5015 residential property sales in Sonoma County (not including those in the 2-4 unit category).  Of these, 1430 were sold by lenders who had foreclosed, commonly referred to as REOs.  Of the remainder, 1020 of these were distressed property sales — 1000 Short Sales plus 20 that were designated simply as being in default. 

So, just slightly over half of all sales would be classified as “normal”— presumably sold by a seller under no duress.  However in this economic climate, making such a statement is not really an accurate representation.  The truth of the matter being that many normal sellers were not doing so under happy circumstances.  Especially those in the higher price range, who sold for much less than they’d paid — but, because they’d made large down payments when purchasing, the proceeds exceeded the amount owed, or they paid “out of pocket” to make up the difference, so these were not reported as short sales. 

The Up Side: For buyers this has created some tremendous opportunities for purchasing a property at a huge discount.  For normal sale sellers — since they can deliver detailed disclosures (which an REO sale does not offer) and can control the sale closing date (which a short sale seller cannot do) — they have an advantage.  If a seller prices their property commensurate with today’s market, makes a reasonable effort to present the property at its best, and makes it easy to show — oddly enough, though this is often referred to as a buyer’s market’,  they can expect to generate multiple offers and look forward to working with a very appreciative buyer.   

Many buyers are disenchanted with the uncertainties of  the short sale process or  the exaggerated “buyer beware” character of an REO purchase, so they’ll pay above distressed property comparables for the benefit of purchasing from an owner-seller who takes pride in their property and who is capable of controlling the timing of the transaction. 

The Future: I do not expect the ratio of distressed to normal property sales to change much in 2011.  However, if lenders devise more efficient systems for processing distressed sales, we may see some lessening of the perceived benefit offered by normal sellers, making their unique product offering less meaningful to buyers and putting downward pressure on the pricing of these properties.

If you’re considering buying through a short sale process please visit my Unique Service for Short Sale Buyers page.  If you’re interested in purchasing a foreclosure property please visit Unique Service for Foreclosure Buyers.

 Want more info?  Email or give me a call — this is my life, this is the stuff I deal with everyday, I enjoy  sharing my knowledge.

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