Short Sales and Foreclosures Perpetuate Decline in Gig Harbor House Values

Well … according to Punxsutawney Phil, the prognosticator of prognosticators, an early spring is in order. That’s right, no shadow on Gobbler’s Knob. So, will Phil’s prediction clear the way for an early recovery in the housing market? Never mind that Phil is only right 40% of the time. It seems the economic prognosticators of our country have nearly the same track record. Many predicted the housing market to return spring of 2011 … I’m very sorry to say, but I don’t think so.

We still have an abundance of short sales and foreclosures. As long as they are around, we cannot recover. The fact remains that these sales continue to drive prices down. I listed a home, a short sale, last April (we’re nearing a year). At that time, comparable homes sales were around $185,000 to $189,000. Today, comparable sales are around the $160,000-$165,000 range; that’s another 10%-%15 drop. Granted it is a short sale and must be priced very competitively. Nevertheless, it is a comparable sale and reduces the value of that demographic. The same goes with foreclosures. In fact, they have driven us all the way back to 2004 pricing; 7 years bad luck. If you recall, 2004 is when the ‘bubble’ started. Statistically, 35% of all Seattle-area homeowners are ‘underwater’ with negative equity. Additionally, from July 2009 to July 2010, the number of short sales increased by 250% !
I’m not trying to be negative Nelly here … hey, if anyone was hoping for recovery, it’s a real estate agent. In fact, I hope I am proven wrong ! It’s always a supply and demand issue, and the saturation continues because the supply of loans/money is diminished, a flood of short sales and foreclosures continue to wash up, and people’s hands are tied because they owe more than they’re worth. It’s not rocket science…

All that being said, winter is traditionally slow … spring is a time of renewal. Last winter’s dismal market preluded a better spring than expected. I am ready for renewal, but remain cautiously and cynically optimistic.

It’s an excellent time to buy !

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