Short Sales Hard to Find, Except in Hard-Hit Housing Markets

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By Christine DiGangi

Home sales and prices continue to rise on an annual basis, and as those numbers have climbed, the number of short sales going through the market has dropped. Short sales, which are home sales in which the sale price is less than the total of the outstanding mortgages secured by the property, made up 5.3 percent of all sales in October, according to RealtyTrac's monthly foreclosure report. That's down from 6.3 percent in September and 11.2 percent in October 2012.

In the report, RealtyTrac Vice President Daren Blomquist explained the shift: "After a surge in short sales in late 2011 and early 2012, the favored disposition method for distressed properties is shifting back toward the more traditional foreclosure auction sales and bank-owned sales," Blomquist said. "The combination of rapidly rising home prices -- along with strong demand from institutional investors and other cash buyers able to buy at the public foreclosure auction or an as-is REO [real estate owned] home -- means short sales are becoming less favorable for lenders."

The national median sales prices stayed consistent from September to October at $170,000, which is a 6 percent year-over-year increase. The annualized sales rate hit 5.6 million, a 2 percent increase from September and a 13 percent surge from October 2012. Despite the drop in short sales, they remain a large part of real estate in states riddled with distressed properties. In October, 14.2 percent of Nevada's home sales were short sales, the highest share among all states. Florida was runner-up at 13.6 percent, followed by Maryland (8.2 percent), Michigan (6.7 percent) and Illinois (6.2 percent).

While Blomquist cited cash sales as a contributing factor to the decline in short sales, some of those same states reported a high percentage of cash sales. Nationwide, such transactions -- those that have no loan recorded at the time of sale -- accounted for 44.2 percent of all sales, a 33.9 percent increase from the same time last year. The percentage of cash sales in September was revised to 45 percent.

Florida led all states with 65.6 percent of its sales completed in cash, followed by Nevada (55.5 percent), Georgia (55.4 percent), South Carolina (53.9 percent), Michigan (49.5 percent) and Ohio (49.2 percent).

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Short Sales Hard to Find, Except in Hard-Hit Housing Markets

Q4 2012 annual percent change in short sales: 46%
Average sales price: $192,098
Average amount short: $65,248
Average Days to Sell from Foreclosure Start: 238

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Photo: Wikimedia Commons

Q4 2012 annual percent change in short sales: 51%
Average sales price: $133,999
Average amount short: $63,864
Average Days to Sell from Foreclosure Start: 198

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Photo: Wikimedia Commons

Q4 2012 annual percent change in short sales: 58%
Average sales price: $184,700
Average amount short: $132,836
Average Days to Sell from Foreclosure Start: 235

Find homes for sale in Sacramento, Calif., or search listings in your area.

Photo: Wikimedia Commons

Q4 2012 annual percent change in short sales: 63%
Average sales price: $124,555
Average amount short: $140,811
Average Days to Sell from Foreclosure Start: 358

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Photo: Wikimedia Commons

Q4 2012 annual percent change in short sales: 68%
Average sales price: $115,107
Average amount short: $87,269
Average Days to Sell from Foreclosure Start: 235

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Photo: Wikimedia Commons

Q4 2012 annual percent change in short sales: 77%
Average sales price: $192,432
Average amount short: $177,748
Average Days to Sell from Foreclosure Start: 235

Find homes for sale in Fairfield, Calif., or search listings in your area.

Photo: Wikimedia Commons

Q4 2012 annual percent change in short sales: 81%
Average sales price: $91,145
Average amount short: $53,158
Average Days to Sell from Foreclosure Start: 191

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Photo: Wikimedia Commons

Q4 2012 annual percent change in short sales: 97%
Average sales price: $145,313
Average amount short: $89,140
Average Days to Sell from Foreclosure Start: 235

Find homes for sale in Fresno, Calif., or search listings in your area.

Photo: Flickr/Mel B.

Q4 2012 annual percent change in short sales: 106%
Average sales price: $126,496
Average amount short: $71,102
Average Days to Sell from Foreclosure Start: 235

Find homes for sale in Visalia, Calif., or search listings in your area.

Photo: Wikimedia Commons

Q4 2012 annual percent change in short sales: 107%
Average sales price: $283,825
Average amount short: $178,201
Average Days to Sell from Foreclosure Start: 235

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