Short Sales Marketshare…25% in Sacramento
I just saw this link to some fascinating December real estate sales data for Sacramento County on an excellent housing industry blog www.calculatedrisk.com.
Here are some high level observations:
1. Short Sale Marketshare/Growth: Short Sales have quickly risen from being relatively rare a couple of years ago (so much so, that there is no Short Sale marketshare data available for the December 2008 period) to being about 25% of sales for December 2009.
Assuming these are ‘high quality’ Short Sales (where the sellers were educated about and properly addressed issues like ongoing legal obligation and tax impact), this is good news for both buyers and sellers, as well as mortgage loan investors. Sellers avoided foreclosure by selling properties pre-foreclosure, buyers picked up properties generally less physically distressed than most foreclosures are, and investors generally had to take a lower loss on non-performing loans.
2. Market supply ‘artificially’ low: As I’ve noted before, the Sacramento housing market definitely seems to have artificially constrained supply. The number of months of inventory for sale in Sacramento was only 3.3 months in December. Economists usually view a 6 month inventory as ‘normal’…so it is surprising to see a number so much below 6 months…when approximately 5million US families are behind on their mortgage.
