2012-the year of the short sale

Here is a very interesting article

2012 - the year of the short sale? By Tom Tryon: "Here is the real-time tale of two real estate markets. One market is depressed and distressed. Propertyvalues are down. Since mid-2006, residential values in Florida have declined by 51%. Hundreds of thousands of properties havebeen, or are, in foreclosure and huge numbers of homes have beenrepossessed. Consider these statewide numbers, presented byanalyst Jack McCabe during last week's Herald-Tribune Hot Topicsforum:- 150,000 residential properties in Florida have beenrepossessed, and are owned, by banks.- 371,000 foreclosure cases are open in courts.- 530,000 residential mortgage loans are at least 90 days pastdue and in default.- 265,000 homeowners have not made a mortgage payment in morethan two years.- 1 million residences are in some form "distressed," whether inforeclosure, owned by banks or in default.

- 46% of mortgages "under water" - in other words, the debtexceeds the current market value of the residential property.Add this number - 809, the average number of days to process aforeclosure in Florida - and it's easier to understand whyso-called short sales, in which owners and mortgage holders sellat steep losses, are viewed as advantageous options and positivemovements in the total market. The overriding question posedduring the forum was: Will 2012 be the Year of the Short Sale? The answer, expressed by the overwhelming consensus of McCabe,the guest speaker, the panel - Michael Braga and Harold Bubil ofthe Herald-Tribune; attorneys Nancy Cason and Tom Avrutis - andaudience was: Yes. There was one caveat: 2013 might be theSecond Year of the Short Sale. That's because the volume ofpending foreclosures — and the imminent threat of even more,could make it impossible to clear this "shadow inventory" fromthe real estate market. There was widespread agreement among the150 people — analysts, lawyers, bankers, real estate agents anddevelopers — who attended the forum that more lenders arewarming to short sales, despite the bottom-line effects ofwriting off losses. What's more, the homeowners in financialperil are overcoming the psychological hurdles - and coming toterms with the financial implications of - short sales. The real estate market is so complex that it's impossible tocover in a multi-day symposium

much less a 90-minute forum. ButI took away two simple points: 1) The current market is like asummer day in Florida: Dark and cloudy during one part of theday, with scattered sunshine and the possibility of bright daysahead; 2) It's no wonder my wife and I have stayed in the samehome for 25 years; real estate makes my head spin