Are Short Sales Over in Sacramento?
Are short sales over in Sacramento? I might recall the year of 2012 in years to come as a year-long Chinese celebration or maybe lost lyrics to an Al Stewart song; however, I am fairly certain that the short sale-blitz in Sacramento has pretty much gasped its last breath. I would know this because I list and sell a ton of short sales in Sacramento, among other types of homes in Sacramento. For the past 8 years, I’ve been very much focused on short sales because short sales have made up a big part of the home sales in Sacramento. It’s not like a Sacramento real estate agent who wants to do business in Sacramento can ignore 1 out of every 3 possible sales.
I think I can safely predict that when my inventory is switching to equity sales, then short sales are beginning to ease up. Most of my new listings are traditional sales for sellers with equity. In fact, very few phone calls are from sellers with a documented hardship for a short sale. Most of the people who call me about a short sale are either trying to sell a home for somebody else in the family who died and the home is underwater. Or, something just happened to create a reason to sell such as divorce, medical emergency or relocation, and the home is underwater.
Most homeowners in the Sacramento area who wanted to do a short sale have already done a short sale. Some of the homes that these sellers have closed as short sales have popped back up as a short sale for the new buyers who bought in 2008 or 2009. Yeah, there have been short sales completed on the same home twice! I’ve worked on a few short sales from sellers who bought in 2010. But that was pretty much the last defining year, and 2010 was on the edge. So, while there are still many homes (around 40%) in Sacramento underwater from the 2005-era, if those owners haven’t dumped the home by now, they probably won’t.
Throw into the mix we’re in the hottest real estate market I’ve ever seen in Sacramento. There is no way to describe the debauchery of this seller’s market. If interest rates were not so ridiculously low, the market would be different, I imagine, but cash buyers are definitely fueling the flames of the buying frenzy. I feel empathy for the buyers out there who can’t buy a home.
But I do believe the year of the short sale is over. We may find many short sales over in Sacramento. At last, the short sale train has left the station. So, don’t pay any attention to those guys in the party hats blowing streamers because they don’t have any tickets. They’re just hungover.