Sacramento Real Estate Blog

I recently reported briefly on a USA Today article that claimed that short sales in Sacramento County were up to 20%. When I hear such numbers, I like to try to first verify them and dig a little deeper. As always, the MLS provides a wealth of data about the real estate market in the Sacramento area, and anyone with a bit of ingenuity can mine it.

My first task was to look at some raw numbers both for the total active units and then for the numbers of those that were in some stage of foreclosure. The three foreclosure stages reported in the Existing Financing field in the MLS are Short Sale, Foreclosure Pending, and REO, which roughly translates into pre-foreclosure, in foreclosure, and bank-owned (after foreclosure). I say roughly because first of all there may be some overlap between Short Sales and Foreclosure Pending. Secondly, one could make a case for short sales not being necessarily all pre-foreclosure, though I’ll treat them in the remainder of the article as though they are. (Elsewhere, I discuss these stages in more detail and the pros and cons of buying homes in different stages of foreclosure.)

Because of the overlap between the categories, the total number of foreclosures in any of the three categories (1283) is different from the total of each of the categories (1338). Looking at the categories and the total actives individually, we come up with the following data:

The following two charts show how the foreclosures stack up as a total percentage of Sacramento County homes currently for sale, and how much of each category makes up the total:

As you can see, homes where the seller was in some sort of financial trouble make up at least 15% of our inventory. (I say at least because in my experience agents don’t always list all the data that pertains to the home correctly). REOs make up the largest portion of these. (The optimist would say it’s because the recent foreclosures are down, but a pessimistic interpretation is that REO inventory is building up even more over time).

In future articles, I will look at how the percentage of short sales has varied over the last twelve months or more, as well as the average price differences between the short sale / REO and the rest of the market.