Luxury Short Sales are a Growing Trend and are Here to Stay!

Short Sales are becoming an increasingly larger portion of the luxury market here in the Maricopa and Pinal county areas, with short sale closings accounting for 15% of all closings over the last 30 days -up from 12% during the same time last year. The majority of these luxury short sales occurred in Scottsdale, Paradise Valley and Phoenix. There were 224 successful sales closed over the past 30 days just in Maricopa & Pinal counties with list price ranges from $600,000-4.5m+.  Last year, during the exact same 30 day period, there were 225 closed escrows.  Of those this year, 33 were Short Sales.  Last year, 28 of those were Short Sales. There is a clear trend that more luxury homes are entering the distressed market.

2,223 homes listed over 600k closed escrow over the last 12 months in Maricopa and Pinal counties.  409 of those were short sales....that's 18%!!

The Scottsdale and Phoenix Luxury home market has been affected by rising interest rates on jumbo loans, limited loan availability, and increasingly strict requirements in qualifying for loans. According to the National Association of Realtors, inventory on homes priced above $750,000 has risen from 18 months in 2007 to a 40-month supply in 2009. NAR also reported that the foreclosure rate on jumbo loans was nearly double the rate on conforming loans ($417,000 and below).

The sluggish economy, lack of opportunities to refinance, the growing inventory of luxury homes, and fewer qualified buyers has created a titanic problem for luxury homeowners who need to sell but can't.

Where do luxury homeowners facing these problems turn to?

There are government programs to help homeowner in distress including the HAMP for loan modifications, and HAFA for short sales. Homeowners with higher loan balances may not qualify for these programs, but most servicers are willing to follow similar processes to minimize losses. Typically a short sale will cost a bank an average of $40,000 to foreclosure rather than short sale, which includes legal fees, depreciation, and carrying costs. This FREE help is available to residents of Scottsdale and Phoenix facing foreclosure.

It is critical for homeowners to understand their options, and should contact a professional who is educated with the foreclosure process, as well as government programs, anti-deficiency laws, and short sales. I have created a website with free information for consumers on alternatives to foreclosure, and am always here to answer any questions or concerns.