Short Sales Lead the Way to Phoenix Real Estate Recovery

Short Sales Lead The Way to Recovery
By Mary Drefs, GRI, CRS, CDPE
At a recent forum regarding distressed homes in the Phoenix area, bank excecutives and housing market experts agreed that short sales would continue to climb and Phoenix and foreclosures would continue to fall. This trend should lead to a rise in the median home value as soon as 2012.

Lenders are now favoring short sales because they realize that the loss to the bank is less with a short sale than the loss in a foreclosure. The average price per square foot in Phoenix sold in a short sale is $71 per foot. The average price per square foot of a lender owned home is $60 per foot. Lenders also revealed that the shadow inventory that could drive real estate values down, is actually in check.

The number of pending foreclosures in metro Phoenix is half of what is was last year, according to Information Market. The number of bank owned homes for sale is almost a fourth of what it was a year ago, according to the Cromford Report. Because Phoenix has seen a record number of short sale closings in the past 3 months, the number of houses listed as short sales in down 72% from October 2010.

According to Tom Ruff, a housing analyst for the Information Market, "The foreclosure crisis appears to be finally behind us. The shift to short sales is a great sign the housing market is moving toward a recovery. I am just not sure why it took lenders so long to see short sales are better for everyone."