Sunday, May 5, 2013

Distressed Sales Loosen Their Death Grip on Tucson Market

In April 2013, the Tucson Association of Realtors recorded 138 short sales and 288 sales of foreclosed properties. Distressed sales accounted for 31.6% of the total 1,348 sales in April.

What an improvement over April 2012, when we had 185 short sales and 413 sales of foreclosed properties comprising 42.7% of the 1,399 sales.

And if that sounds horrible (which is was), let me remind you of the really dark and scary days of 2011 (no, not that!), when 112 short sales and 512 sales of foreclosed properties were 49% of the sales in April two years ago. While short sales were 9% of the sales two years ago, foreclosed properties were 40% of the sales. Now banks have finally started to figure out that foreclosing is bad for people, banks and the economy (plus our government has finally stepped in to stop the worst of the foreclosure abuses). Last month 10.2% of the all sales were short sales and foreclosed properties accounted for 21.4%.

Short sales frequently sell for a little under market value, and bank-owned properties that a lender has taken back from a borrower in foreclosure almost always sell for way under market value. These low sale prices drag down the value of neighboring properties. The fewer houses we have selling at fire sale prices, the better for the majority of sellers who are not underwater or delinquent in their mortgage payments.

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