Foreclosures and Short Sales Increase in Sacramento County
Of all the market numbers we write about, no other indicator has changed so dramatically over the last year as the number of short sales and REOs (real-estate-owned, i.e., “bank repos” or “bank owned”) that are being sold through the MLS. In fact, no other indicator even comes close.
During the period from the first quarter of 2006 to the present, Sacramento County has gone from a market where short sales and foreclosures were practically unheard of, to a market where they make up almost one quarter (23.7%) of the available inventory.
In the first quarter of 2006, the short sales and foreclosures together accounted for less than 1/4 of one percent of all sales. Five REOs and four short sales were sold, of a total of 3,614 units overall. A year later, in the first quarter of 2007, foreclosures and short sales made up approximately 9% of the sales volume. 2,872 total residential units were sold in Sacramento County during this period, of which 191 (6.65%) were listed as REO, and 69 (2.4%) were listed as short sales.
The sales numbers for Sacramento County for the second quarter of this year (to date) are higher, with 12.58% of sales in the REO category and 3.46 in the REO category, or approximately 16% of all sales.
Though we show more sales of bank repos than short sales, we actually have more short sales in inventory. The inventory numbers are where it really looks like a short sale invasion. With 10,374 active units as of 5/22/2007, 1,163 are listed as REO (11.21%), and 1,294 are short sales (12.47%). As we noted at the outset, the total of these two figures comes quite close to one quarter of all available inventory.
(Note: The number of short sales in the MLS as a percentage of the total is difficult to gauge with any accuracy because there are two fields where short sales are reported. We have generally used the higher number).
