Everyone knows values have been increasing, so it’s really not a surprise to see that distressed sales have experienced a huge decline at the same time. As I shared on Monday, April and May 2013 were the first two months in over four years where foreclosure sales represented less than 10% of all sales in Sacramento County.
There are many layers that make up value in a market, such as interest rates, employment trends, supply and demand, the media and public perception, legislation, the amount of cash, affordability, and more. The number of foreclosures is definitely an added layer because it tends to impact prices. Generally speaking, when there are too many foreclosures in a market, prices will decline, and when there are very few, the market has more room to flourish.
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Questions: Where did the foreclosures go? Why do you think short sales are seeing a decline?
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Richard Stabile says
Rising tides raise all ships. Prices rising have had the same affect in New Jersey. Shortsales lessen as the competition for moderately priced homes increase. Foreclosures are lessening because the houses are selling and not going the route.
It funny how things change.
Ryan Lundquist says
Well said, Richard. I appreciate your take. I’ll be curious to see how the market develops over the next 12-24 months.
Tom Horn says
Glad to hear the great news for your area Ryan. While the Birmingham, Alabama area did not experience as many foreclosures as Sacramento did, our area has also seen less distressed sales over the past 12 months. This has effected the average sale price in a positive way. I hope it continues this way for both of our markets.
Ryan Lundquist says
Thanks Tom. Great news for Alabama. I’m glad you guys were not hit as hard as us. Our local market competed with other markets in Arizona and Florida for those hit the hardest. 🙂 It is nice to see some positive trends (even though there are still some red flags about the market).