Nevada City Virtual Tour

Saturday, January 19, 2013

Realtors Report Multiple Offers, Quick Sales but Continuing Appraisal and Credit Issues

Realtors Report Multiple Offers, Quick Sales but Continuing Appraisal and Credit Issues

Shadow inventory is still high, but it is about 1 million fewer homes than two years ago. Decreases in sales inventory and a decline in the distressed home sale of existing home sales are projected to lead to continued market improvement.

The incidence of multiple offers has led to shorter marketing time and approximately a third of respondents noted that 57 percent of properties were sold within 3 months and many in less than a month. Only 20 percent of Realtors reported selling houses that had been on the market for six months or more compared to 28 percent a year ago. The median marketing time in November was 70 days compared to 98 days in November 2011. Even the timeline on short sales while still protracted has dropped from a median of 119 days one year ago to 90 days.

About 22 percent of respondents reported they had sold a foreclosed or short sale property and that cash sales accounted for about 46 percent of those sales compared to 41 percent in October. Distressed properties sold on average at a 20 percent discount and short sales at a 16 percent discount. Discounts were strongly affected by property condition. Those of above average condition sold for a 13 to 15 percent discount while those in the poorest condition were discounted 34 to 38 percent.

Approximately 30 percent of respondents who made a sale reported cash sales in November with most reported to be investors and international buyers. Approximately 9 percent of first-time homebuyers paid cash, compared to 70 percent of investors who paid cash. A sale to a first-time buyer was reported by 30 percent of Realtors, well below the 40 percent share historically enjoyed by novice homebuyers. Respondents noted that this reflects the difficulty in securing mortgage financing, delays with short sales, and purchases of lower priced properties by investors. 

Realtors also noted that appraisals continue to be a problem because values are not keeping pace with the appreciation in market values. Realtors complain that appraisers continue to use foreclosures as comps and they are encountering out-of-area appraisers who do not know the local market. They also expressed frustration at the slow turn-around time and appraisal requirements that are an unnecessary expense on the buyer.

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