How are Short Sales Faring?

Despite all the short sales that seem to sit around forever while lenders ignore them, short sales are faring surprisingly well overall when compared to the last few years.  Are lenders finally figuring out it makes more sense to sell a property short than to foreclose it, worry about it, deal with it, and end up selling it for less than they would have gotten in a short sale situation?  Possibly.

According to Realty Trac, short sales outnumbered foreclosure sales nationally for the first time in January 2012.  23.9% of homes sold in January were short sales.  Only 19.7% of sales in the same month were foreclosed homes.  Overall, short sales increased 33% in the last year.

The greatest increase in short sales was in the western part of the country, with California leading the pack.  In fact, nearly 30% of homes sold in California in January 2012 were short sales.  Over 27% of homes sold in Nevada in January were short sales, and over a fifth of homes sold in Arizona and Colorado were short sales. 

In the Midwest, Michigan, Wisconsin and Indiana had short sales in excess of 10%.  In the south, in Georgia short sales exceeded 20% of sales in January.  In Florida, short sales exceeded 13% of sales closed in January.

Psychologically, a short sale can be a lot easier to digest for a distressed homeowner than a foreclosure.  With any luck, banks will come around to short sales more and more!