I taught my training class today at Keller Williams here in Santa Rosa, Sonoma County, "The Wine Country"! Now I think we can do a play on words here because I keep hearing Realtors/Agent complaining about the lack of inventory, lack of REO's and now having to "Sell" the dreaded "Short-Sale". Yes, this is truly becoming the "Whine Country"!!
Our local newspaper, the Press Democrat, made a nice headline with "Sales are slipping" as our "closed sales" are down and we should be hitting 500+ units but just eecked out about 480 in June. Now here's the reason our "Sales" are down. The hottest price point is the sub $400,000 price point. This is why our median price still hovers around the $305,000- $315,000 range. We are selling half above and half below this price point. Now the bulk of those sales have been the foreclosed home market or REO (Real Estate Owned) bank owned properties. However, with the moratorium and more informal agreements with Uncle Sam, we've seen this popular listing waning in our "Whine Country". Hence Realtors/Agents are taking the pent-up demand and selling "Short-Sales".
The scoop on Short-Sales is this; we have 1050 Continue to Show sales now in escrow. This is the less firm escrow where inspections, loan approval, etc have yet to be done and more importantly, with the Short-Sale, we've YET to get LENDER APPROVAL!! What happens is the average time on the market for Short-Sales is 180 days and we have over 665 of those 1050 Continue to Shows being "Short-Sales" escrows. They go in and take forever to close. Hence our "Closed Sales" are being delayed as the time gets stretched further out into the future. For the first time since we've tracked "Short-Sales" we broke the 100 closed sales mark for this type of transaction. The "Short-Sale" has been tracking upward very slowly. And it shows the learning curve, though still tough for many an agent, is starting to yield some decent numbers. We are NOT closing THAT many more REO's! Perhaps 165 for the month of June.
If you add the two we've got about a 45% share of ALL sales still being the foreclosed market segment. Now with this lack of inventory comes "overbidding" and then the subsequent appraisal issues. We no longer have "Willing Buyer/Willing Seller"! An overbid of $50,000 in our county is being shot down by an appraiser from Gilroy who has gotten his "assignment" from the HVCC to perform the appraisal. This is creating major headaches for one and all. So now you've got to sell your house not only to the Buyer but the underwriter, appraiser and most likely a "final review" guy!! Daunting to say the least.