There were 3,722 short sales in Massachusetts in 2011, an increase of 9% over 2010, and we expect this upward trend to continue. At this rate of increase, we will see at least 4,056 short sales for 2012. Short sales in Massachusetts accounted for 6% of total home sales in 2010, in 2011 they accounted for 6.8%.
As short sales become more popular, homeowners are beginning to realize they don’t have to let their home go into foreclosure. They’re starting to understand that a short sale typically has much less of an impact on their credit and they’re able to purchase a home again after a short sale sooner than with a foreclosure.
Banks don’t want homes to go into foreclosure, either. Banks make more money on short sales and don’t have to pay the legal fees associated with a foreclosure. In 2011 the average price for a short sale in Massachusetts in 2011 was $199,329, 30% more than the price of a foreclosed home, which averaged $152,927.
A new initiative started by the Federal Housing Finance Agency now requires banks to be more aggressive in contacting homeowners who are behind on their mortgage payments. Loan servicers will now get paid to make frequent phone calls to homeowners to advise them on the best ways to avoid foreclosure, including doing a short sale. This initiative started in September 2011, but we expect the new procedures to step up in 2012, which will prompt more short sales.
Short sale homes that fell into the $150,000 to $199,999 price range accounted 24% of the short sales in Massachusetts, for an average sale price of $171,735. The average prices for short sale homes remained flat compared to last year, even with the increase in the amount of short sales. So we expect the short sale home prices to stay about the same in this range for 2012. Average prices for all homes sold in Massachusetts in 2011 were actually higher than in 2010 by .65%. This is due in part to more short sales and fewer foreclosures.
2011 also showed a 12.8% decrease in foreclosure sales in Massachusetts. There were 5,945 foreclosure sales in 2011 compared to 6,711 in 2010. Banks delayed processing foreclosures due to the so-called “robo-signing” scandal in October 2010, when foreclosure documents were signed without proper verification, which called into question the legitimacy of the foreclosures. Then in December 2011, the fraudulent loan practices lawsuit brought by Attorney General Martha Coakley delayed foreclosures further. Banks slowed the foreclosure process to revisit previously filed foreclosure cases and review the documents more carefully. These delayed foreclosures from 2011 were pushed into 2012 so we expect to see an increase in foreclosures this year.
Source: MLS Property Network
Join our mailing list for our FREE Housing Report and the latest updates!
Text: MLREALTYNE to 22828 to get started. (message and data rates may apply)
|Or simply Click Here for our Email Newsletter|