This is the second article in a series spotlighting short sale trends in early 2012, which seem to indicate that short sale volume is on the rise while short sale prices are trending lower — a good mix for prospective buyers and investors. This series is largely based on a short sale report issued by RealtyTrac for a special live broadcast hosted by the Charfen Institute on April 19. Download the full RealtyTrac report.
In January 2012 there were more than 35,000 pre-foreclosure sales — typically short sales — nationwide, on pace for more than 105,000 pre-foreclosure sales for the first quarter. If that trend holds, it would make first quarter short sales the highest quarterly total since the peak back in the first quarter of 2009.
January pre-foreclosure sales were actually down slightly from a revised December number of more than 37,000, indicating that the shift toward short sales may have even begun late last year. But there’s no doubt the trend is higher from a year ago. January’s pre-foreclosure sales total is up 33 percent from January 2011, and the increases are significantly higher in some states — a more than 100 percent increase in Georgia, and a more than 50 percent increase in California, Massachusetts and Michigan, among others.
In addition to the eye-popping increases in pre-foreclosure sales in some states, the shift toward short sales becomes apparent when comparing pre-foreclosure sales numbers to bank-owned (REO) sales numbers. In the past, REO sales consistently outnumbered pre-foreclosure sales. Although that continues to be true nationwide, the gap is closing, with only about 2,600 more REO sales than pre-foreclosure sales across the country in January 2012.
And in 12 states, including California, Florida, Arizona, New York and New Jersey, pre-foreclosure sales actually outnumbered REO sales in January 2012.
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