Superbowl 2011 has come and gone. As they said in California real estate, “Superbowl kicked-off another real estate season!”.
Indeed, we are entering the 2011 season. We see inventories in the Valley rising, weekly sales holding steady around 470 since the beginning of the year. Closing transactions has come down a bit this week, from 181 to 161 (2/14). Overall, the closing activities during the holiday seasons were strong in the Valley, (1094units-Nov10, 1202units- Dec10), and it has died down a bit in January, 866units.
I like to stress a particular scenario of my personal observation on the short sale area. As we know, most of the sale transactions closed during 2009 -2010 were short sales, and I can say, 4 out of 5 short sale listings that closed, received multiple offers.
Due to the popularities of short sale, it creates its own phenomenons:
1. Buyers/investors dive into a bargain property, multiple offers resulted
property sold HIGHER THAN ASKING PRICE lots of time.
2. Potential buyers may or may not be able to visually inspect the property BEFORE they put in an offer.
3. Sellers/tenants of the property get too paranoid of buying crowd and questions, refuse to let the property been viewed or exaimed, or won’t cooperate with the pre-views.
4. The average short sale takes about 6 to 9 months in 2010. The process time has been improved from 2009. However, since more short sale inventories are in the market, and sellers are using this as a bargain tool to BUY TIME from being declare foreclosures or be sent to auctions and loose dwelling place. And lenders seem cooperating.
So, what this mean for the market of 2011:
1. We’ll see continuing Short Sale transactions dominating the business.
2. It’s a great time for first-time buyer and investors to come into the market.
3. Average escrow length will be longer. (as compared with regular sales closing between 45 – 60 days).
4. Buyers have more choices in selections but less info on disclosures. Buyers are at their own risks in purchase.
5. Buyers must wait at least 45 days to get lender’s approval in price before proceeding for inspection.
Do you have a strategy in bidding short sale properties?
We’ll continue in next post.