Short Sales are the latest rage with the mortgage industry and while it is definitely preferable over foreclosure, the end result is very similar... you take another homeowner out of the pool of owners for at least 1-2 years and place another home into the current inventory. What's wrong with that? Well, there are only so many people out there and while our local market is already 40% foreclosures and short sales the lending institutions are reportedly planning to double the number of short sales this year!
Why do you care? The decline of housing prices will eventually have an greater effect on the economy as a whole if property values continue to decline, tax revenues will fall. According to state law, property taxes are tied in to property values.
What if you need to move and your house is not worth what you paid for it? Do you ruin your credit for a few years in order to be able to take that dream job in another state?
A better answer is to find a way for these people to stay in their homes and not add it to our bulging inventories at all in my opinion. Who can do this? The lending institutions can workout solutions with individual lenders and I believe the are trying to do that as mush as possible, but many are not even able to get them on the phone because the are so backlogged. With the current time-frames allowed by law, many are not able to reach their lenders to reach agreements.
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