Distressed properties such as short sales and bank-owned homes have continued to make up approximately 20 percent of all sold homes in Baltimore County in September 2011, according to recently released data from MRIS Inc.
Out of the total 544 homes sold in the Baltimore County, 69 were sold by REO agents and 36 by short sale realtors.
Since the downturn in the real estate market in Maryland, the volume of bank-owned homes (REOs) has exceeded that of short sales by a factor of about 4. That ratio is quickly decreasing and is currently much closer to 2 to 1 in favor of REOs as more and more homeowners ask for short sale help from local realtors as well as from their lenders.
The banks themselves are finally realizing that forcing the borrower into foreclosure rarely makes sense given the timeframes of the foreclosure process as well as the additional costs.
As a short sale Realtor in Baltimore, I often receive calls from homeowners who are told by their lenders to seek assistance from a local short sale specialist. Given this trend, we should expect short sale listings to become an increasing part of today’s real estate market.
There were 875 new listings that came on the market this past September. Of those, 95 were homes listed by short sale sellers and 88 by banks. This is the seventh month in a row in which new short sale listings outnumbered new REOs.
The average sales price for all sold homes in Baltimore County increased by approximately 6 percent in September compared to the previous month and by almost 3 percent when compared to September of 2010.
Average price of bank-mediated sales (short sales and REOs combined) also increased slightly from the previous month while decreasing when compared to last September.
Bank-mediated listings, on average, do pose a good deal for the buyers. The average sales price of a traditional sale in September 2011 stood at $289,433 compared to $167,521 for a combination of REOs and short sales. It is best to take these figures with a grain of salt given the fact that distressed properties are probably more likely to occur in less expensive neighborhoods given their demographic composition as well as mobility patterns.
The ratio of sold price to original listing price remained relatively stable at just less than 90 percent in September. All sellers should remember, however, that as the property remains on the market for an extended period of time, this ratio drops down significantly.
For example, homes that are on the market for more than 120 days, on average, sell for about 10 percent less than the average. Whereas those homes that are priced properly and to the market, and those that sell in the first month of the listing, should expect to bring in very close to the actual list price.
Overall, the market in Baltimore County has remained relatively stable this past September. We should expect the number of transactions to start dwindling down, given the cyclical nature of the real estate market. The relative stability of average prices for all properties, including short sale homes and bank owned properties, should be a welcome sign for many home sellers.
It is too early, however, to start proclaiming that we’re on the upward swing. The interest rates remain very low and the inventory is still there. At the same time, I think we can put a stop to doomsday scenarios as we get into the holiday mode.
The rest is in the hands of a higher power – the market.