Short sales are looking more attractive to many members of the real estate market, including “luxury” homeowners who have given up on trying to wait out the market. Increasingly, luxury homes are going for extremely discounted prices as the owners opt to get out rather than leave their homes on the market until they sell[1]. For example, in expensive areas like Nassau County, New York, alone, 22 houses exceeding $1 million are listed as short sales. Richard Halloran, managing broker for Coldwell Banker’s Babylon office, believes that the holdups in foreclosure filings and proceedings are actually helping more homeowners use short sales to get their homes off the market. “With the courts at a standstill…the banks are getting better at doing short sales,” he explains. Other numbers support Halloran’s hypothesis as well, with Home Affordable Foreclosure Alternatives (HAFA) short sales and deed-in-lieu transactions up 73.7 percent in April over March of this year [2]. The program has received a great deal of criticism for its slow start and low incentives for servicers and investors, but more parties may be interested in “playing” now that other foreclosure routes appear hugely delayed or even closed.
Do you think that it would be a good thing for the real estate market if more short sales were completed?
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[1] http://www.nytimes.com/2011/06/12/realestate/more-luxury-home-owners-opt-for-short-sales-in-the-regionlong-island.html
[2]http://www.dsnews.com/articles/hafa-short-sales-up-over-70-in-april-2011-06-10