Short Sale Delays Drive First-Time Buyers From Market: Survey

Processing delays have taken their toll on first-time homebuyer interest in short sales, according to the latest HousingPulse Tracking Survey released by Campbell Surveys and Inside Mortgage Finance Monday.

First-time homebuyers were a part of 39.7 percent of the short sale transactions completed in August, the HousingPulse survey found. That tally marks a three-month slide in the share of short sales that went to first-time buyers, and is the lowest percentage for this buyer segment ever recorded by the survey.

The first-time homebuyer share of short sales hit a peak of 54.1 percent of all short sale transactions in November 2009, just before the originally-scheduled expiration of the federal homebuyer tax credit, according to Campbell Surveys.
Short sale transactions have garnered a reputation for being problematic for buyers and sellers alike, with typical approval times of several months after a homebuyer first submits an offer.
Campbell Surveys has found that factors slowing down short sale approvals include lost paperwork, coordination with multiple investors, slow appraisals, and mortgage servicer understaffing.

With average time-on-market for short sales stalled at 16.6 weeks – with the majority of that time spent waiting  for approval of the transaction – short sale transactions are becoming less popular with first-time homebuyers, according to the polling firm
Still, for some first-time homebuyers, average short sale prices of 27 percent less than non-distressed properties compensated for the wait time, Campbell Surveys said.
Short sales are just one type of distressed property, with foreclosed REO homes also a significant component of today’s housing market.

In August, the HousingPulse survey found that short sales accounted for 17.1 percent of the home purchase market, with damaged REO and move-in ready REO accounting for 13.2 percent and 15.6 percent, respectively.

Real estate agents responding to the August survey indicated that homebuyers frustrated with short sale delays are resorting to placing offers on multiple properties, with the intention of closing on only one. This practice can further bog down the short sale approval process.
The state of California is a hotbed of short sale activity, with these sales accounting for 31 percent of home purchases in the month of August, according to the HousingPulse survey.
“Short sales buyers/investors were generally looking at several properties and if one already had first and second approval, buyers would move towards the property that had a better chance of closing sooner. They would get tired of waiting on the short sale process,” commented one California agent.

“I feel that selling agents are telling the buyers it’s okay to write multiple offers because they can walk away with no risk, especially on short sales,” reported another agent.
The HousingPulse Tracking Survey from Campbell Surveys and Inside Mortgage Finance polls approximately 2,500 real estate agents nationwide each month to assess market trends surrounding homes sales and mortgage lending.

Realtors see ray of hope among dismal housing market | ksl.com

SALT LAKE CITY — U.S. Home sales have hit a record low, but Utah Realtors say there is a ray of hope for the local market.

According to the Utah Realtors Association, homes are starting to sell again, and August was a pretty good month.

But it's still a buyers' market, and many sellers are finding they have to put up some bargain prices to get their homes sold.

Like many other homeowners in Utah, Krista Numbers has learned that selling a home right now isn't all easy.

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"You're competing with a lot of things — like short sales, and bank-owned, and foreclosure — so you have to be aggressive," she said.

And that's what she did. Also a short sale, she put her home up for a bargain price and got a buyer in just a few days.

Numbers has no doubt it's a buyers' market out there, and that brings some hope for the future. "All across the valley we are finding that there are some fantastic homes out there," she said.

Overall, Utah Realtors say that's bringing a positive trend for Utah. While sale prices are still low, the increase in activity means there are signs that our local market is on the gradual road to recovery.

"We're seeing more confidence in the market, and we're seeing people get out there and take advantage of the positives out there — like affordability," said Deanna Devey, with the Utah Association of Realtors.

Realtor Vann Larsen says the good news is homeowners can make that quick sale if they're willing to face the facts.

"The sellers aren't going to get what they thought their home was worth a few years ago, but those values were inflated," he said.

That is the bad news. The median price for homes sold is down about 10 percent from last year.

Still, Numbers says if her family can just stick it out, things may work out better in the long run.

"The thing that I have definitely learned with this market is you have to roll with it. You're buying high and selling high, or you're in a market where you're gonna sell lower and you're gonna buy lower," she said.

There were also fewer homes on the market in August than a year ago. Overall, realtors say since prices didn't get as inflated as they were in other parts of the country, things are improving faster. Still, it's a buyers' market out there, as the conditions very slowly improve for sellers.

Email: manderson@ksl.com

via ksl.com

1st closing of the week thanks Kellie it was a blast!

Lori Flemimg CRS.GRI E pro CDPE
Associate Broker
Century 21 Golden Spike
801 940 9560
Lorifleming@century 21.com