We have been told that banks and servicers are now using short-sales, instead of foreclosures, as their primary defaulter-disposal method.
It appears that the conversion is well underway in San Diego County – here are the number of residential distressed-sales and average pricing for the six months between April 1st and Sept. 30th:
| San Diego Co. | 2011 | 2012 | % Chg. |
| REO Sales, # | 3,778 | 2,381 | -37% |
| REO Avg. $/sf | $178/sf | $184/sf | +3% |
| Short Sales, # | 3,465 | 4,404 | +27% |
| SS Avg. $/sf | $195/sf | $189/sf | -3% |
Yes, the conversion from foreclosures to short sales is happening, though it doesn’t look good for the pricing trend. You could call +/- 3% just statistical noise, but for those who believe that the lenders save big money by short-selling vs foreclosure should think again.
The fraud seems to be getting more outrageous too – did you see the one yesterday that if the realtor would have listed it at market value, the seller would have made money? Instead, he listed it at $100,000 below the loan amount, and called it a short sale – at least for the usual five seconds before he withdrew the listing!
(withdrawing a SS listing is common when the listing agent has his own buyer and doesn’t want competition – he shows the bank a copy of the listing taken during the five seconds that it was active)
