Some prognosticators have predicted that the number of short sales completed in 2013 will double the mark set last year and approach one million for the calendar year.
Full disclosure: I am NOT an economist. I am NOT a statistician. My rebuttal is not predicated on anything more substantial than common sense.
But here are my reasons that we will not see a million short sales this year:
First and foremost, the system can’t handle the volume. There isn’t enough infrastructure in place to successfully complete that number of transactions.
Second, most of the pre-2006 investors are already out of the game. We are seeing less of these kinds of “bulk” short sales these days.
Third, many properties are getting closer to the “treading-water” mark and the sellers are less likely to succumb to the rigors of short-sale scrutiny, and will opt to test the market in hopes of a non-distress sale.
And finally, and this is the one where common-sense applies the most, many of the over-appraised, high interest rate loans have already been converted to lower principle, lower interest loans either by attrition or modification. Five years is a long time in a world where the average seller has owned their home for about seven years anyway.
I could be oversimplifying the situation. Perhaps I am missing something obvious.
Only time will tell!