Redondo Beach Real Estate: Short Sale Trends and Statistics

Short sales are becoming more prevalent in North Redondo Beach (90278) and are having a greater influence in the real estate market. Short sale list prices continue to affect pricing on standard sales even though most short sales will fail to close and if they do so, not at the initial advertised price.

As of this posting, there are currently a total of 124 active MLS listings in Redondo Beach of which 26 (20%) are short sales. You would expect this trend reflected in closings. It is not. Year to date there have been 309 closed real estate transactions in North Redondo Beach of which only 43 (14%) have been short sales. Currently there are 23 short sales in escrow (MLS status "pending" or "backup") out of a total of 73 properties in escrow. Of course many of these short sales will remain in escrow for quite a while waiting for approval but we do not expect to see a new trend indicating that over 30% of North Redondo Beach real estate will be sold as short sales.  FYI, of the 35 North Redondo Beach home sales reported in the MLS during September 201, only 4 were short sales. That's 11% which if anything indicates a downward trend from the year to date statistic.

We believe that one of the drivers in the spike of MLS listed short sale real estate is the increase of filings in August as indicated in the chart below. A lot of this activity was driven by one servicer, BofA, being more aggressive and active than in previous months. Clearly, it wold be a major deviation from recent history if the majority of the listed short sales were approved and closed.

Many sellers are more inclined these days to list their home as a short sale than were a few years ago when the housing collapse began. One reason is that there is less of a social stigma. In fact, short sales are the "new normal", if you will. Homeowners also realize that they may get relocation money or cash for keys of they work with the bank to do a short sale and if nothing else, extend the time they can be in the house without paying their mortgage or property taxes. It is not uncommon for a homeowner to extend their period of "free rent" so to speak for over a year and we have even seen incidents of 2 plus years before a family is evicted. Speaking of which, take a look at the following graph to see how some of these situations play out.

As you can see, the time to foreclose is trending down from where it was previously while the number of NODs filed are increasing. Hmnn. Curiously, and we'll discuss this in a future blog post on bank owned REO foreclosures and the "shadow inventory", the time it is taking banks to resell has spiked way up. We think this is due to a few very poorly priced REO properties that have been lingering on the market for quite a while. But, lest we digress to far, best to stick on the short sale topic per se.

For the most part, buyers now realize that buying a short sale can be a long and drawn out process that may not have the desired outcome (or price). Be that as it may, there have been some exceptional short sale deals and our advice to buyers remains as it has always been:
  • Don't be seduced by the short sale listing price - that may be a figment of the listing agent's imagination.
  • If there are attributes of the property that you like and would want to buy it even if it was not a short sale, it makes sense to make an offer.
  • If you make an offer on a short sale, be patient and then be prepared to wait. Most are not approved and those that are take a while.
For more information, on short sales, call 310 975 5139. Search for Redondo Beach Short Sales listed in the MKS.