Considering Buying a Short-Sale? 3 Markets in Focus
Many people considering buying a home right now are also considering short sales. According to a CNBSC article from June of this year, “the Campbell/Inside Mortgage Finance Housing Pulse Tracking Survey reported that nationally, short sales hit a record high of 19.6% of all home purchase transactions in March.” Consumer attraction to such properties exists for first-time buyers and more seasoned ones, because a) we have so many to choose from with the record setting inventory of them and b)– ostensively anyway– we can purchase a short sale for markedly less money than we can a normal market-rate property.
We say “ostensively” because short sales are not easy and they are not quick. Potential buyers who don’t know what they’re getting into could waste months of time choosing and making an offer on a house, only to be rejected by the bank months later. Such an uncertain and lengthy process has its disadvantages economically, not to mention its potential impact on our mental health!
None of this is to say short sales aren’t excellent opportunities in many cases. That’s why this week we’re focusing on short sales– to make the process more transparent and thus, the consumer more informed.
Three Case Studies
We picked just 3 the metro areas ZipRealty serves for these case studies with the following logic:
Portland is a relatively inexpensive place to buy a home and also to live in general. The median, as discussed last week in our first-time buyer blog, is a little over $260K, which is between the national median and the national average sale prices for the nation as whole in July, 2011. Portland is also a ZipRealty open market. This means that buyers can search homes in Portland without restrictions. You do not need to register or provide any personal information.
From the information we see that more homes sell in Portland for market value than they do at distressed property value; we also see that foreclosures are more common than short sales. However, both types of sale are very much present in the metro’s market. You can search for short-sales, or any kind of property for sale in Portland, here.
Denver’s median is less than Portland’s: around $202K is the median selling price for June-August of this year. Denver has made many national lists over the years as one of the nation’s “best places to live,” including one published in a 2010 Men’s Journal. Not surprising then that the real estate sale distribution chart shows a relatively heathy market.
Denver has enjoyed 30% or less distressed sales in overall sales the past year, but 30% is still 3 in every 10. That should mean a decent inventory of choices for a buyer seeking a distressed property. Note that again, although bankruptcies outnumber short-sales, you can find short sales in the affordable, desirable Denver metro. You can search for only short-sales (or for any MLS listings you choose) using ZipRealty’s home search tools here.
Finally, the Las Vegas metro represents a market where distressed property sales actually outnumber market-rate sales. The city then may offer rich investment opportunity for someone who wants to buy inexpensively and can afford to wait until the market recovers to sell. For those who are buying their first homes, Las Vegas represents an affordable option: median sold prices for the June-August of 2011 were $116,100. You can begin your Las Vegas home search here.
Of the three metros studied here, Las Vegas is the strongest “buyer’s market,” and that includes short-sale buyers. But unless you area already experienced with short-sales, tune in Wednesday for Tips on Buying a Short-Sale.