Short Sales Inhibit Pricing
You keep hearing that banks and servicers have changed course, and are pushing defaulters to short sale, rather than face foreclosure. It’s been backed with the common belief that short sales cost less for the lender, and save the borrowers’ credit.
Does the new commitment to short sales appear in the stats? Banks did close 32% more short sales this summer vs. the June-August period last year. But as you can see below, it looks like they just stepped up production to the next plateau, instead of creating a whole new machine.
There are 3,527 short-sale listings marked ‘contingent’ in San Diego, which are those waiting for lender approval. Most will probably be approved slowly over the next few months, helping to bolster the year-end stats and make the 4th quarter market look stronger than it really was.
How does short-sale pricing compare to the non-short-sale pricing?
If it weren’t for short-sales, statistical increases in pricing would be more obvious.
If bankers were serious about market recovery, then they should cancel this insane pandering to defaulters. It would encourage the honest bill-paying folks, and help clean the bums out of the realtor community. Instead, short sales are just the latest can-kicking device!