The Truth About Short Sales In Salt Lake County, Ut
It's not easy to discover the truth about Short Sales in Salt Lake County, Utah, or any other Utah city for that matter. I'm not even sure what truth we should be looking for, and for whom we should be looking.
But last weekend I got a wake up call; A couple of clues.
Two things happened that made me want to take a new look, at the market and make sure we knew what we were doing.(and what we were saying).
The first thing was...
We had a deal go upside down (not a short sale) because the VA appraisal was $50,000 dollars light.
We Immediately blamed the distressed property phenomenon, and the effect Short Sales and REOs have on current comps that Real Estate Appraisers have to work from.
That is something I will deal with in another post....... It is a complicated problem.!!!
The second thing was that while looking at the appraisal problem, I came across some articles written by a local Realtor that claimed that In Salt Lake County, only 25 houses considered to be short sales actually closed over the last 6 months. Further, the chance of home buyers closing a short sale or foreclosure home were about 4%..... Not exactly an endorsement for exposing our clients to work outs. IE: Bank Owned Homes, REOs, Foreclosures, or Short Sales.
Without picking a fight with a colleague, I am going to post the Truth about short sales in three of the cities around SLC that because of new construction seem to get the most short sale activity; South Jordan, Herriman, and Riverton Utah.
Riverton Utah:
Since the beginning of 2008, twenty one single family homes have been listed on the MLS that are characterized as a distressed property. Eight of these houses have been sold and closed during that time. Four more homes are under contract and expect to close. Assuming only 3 of the 4 houses actually close, then 11 of the 21 homes for sale in Riverton Ut will have closed. Thats a very respectable 52%. A far cry from 4%.
Herriman Utah:
So far this year, there have been 57 homes for sale in Herriman that can be considered short. Nineteen have sold and closed with another 14 Herriman Homes under contract. If only 10 of the homes under contract close, the success ratio is almost 51%. Once again a long way from 4%.
South Jordan:
There are 37 homes for sale in South Jordan that could be called short sales, bank owned or require a third party to approve any house that is sold. Sixteen of those homes/ condominiums have been sold and closed so far this year. Half of these were in either Daybreak or Jones Meadows. Eleven additional houses/condos are under contract and if 9 of those go to closing, then almost 68% of the South Jordan short sales will have been successful.
So... now the truth about short sales.
In just 3 of the 26 cities that make up Salt Lake County we were able to account for about 65 home/condo sales over the last 4.5 months. Thats over 14 a month in just 3 Salt Lake Cities. Not great, but not bad either.
Over the next few days were going to examine short sales in depth. We'll look at at the obvious problems caused by using short sale comps to value homes. We need to look at recent sales to see how much money actually was made pursuing Bank Owned, Foreclosures, and Shorts. The way Realtors list these homes needs to be studied and maybe another truth exposed.
In any event stay tuned, and if you feel compelled to look at some of the homes listed as short sales, or Bank Owned, stop by our website @ Salt Lake Real Estate and see pictures, locations, prices and general information about almost all the homes for sale in the Salt Lake Valley. Or call us @ 801-567-0946.
In the meantime watch for more installment of The truth about Short Sales in Salt Lake County Ut.