Ah, how I remember those easier times for short sale transactions. What? "Easier"? Yes, in fact. I am writing my inaugural post to a blog that was started in 2007 and it is cause for reflection. The past four years have been a blur in some ways, but one thing is crystal clear, short sales in 2007 were a whole lot easier. OK, I know that a lapse of time can tend to result in a lapse of memory, but in this case I am pretty sure that my recollection of the past is fairly accurate.
What does this trip down memory lane have to do with reality? Especially since it is 2011 and short sales are anything but easy. Well, it is an exercise of perspective for the sake of encouragement. It is a tool, of sorts, to help alter ones expectation about the future. Short sales are going to be with us in the Arizona market for many, many years to come, and we are just at the beginning. In 2007 there were only a handful of short sales and most people thought of short selling stocks in association with this new term du jour. In 2011 everybody knows what short sales are, and most have the same reflux at just a mention of the words.
So where's the encouragement? As I said, we are just getting started. As in any social experiment, there must be cycles to go through. We must ebb and flow with iterations and reiterations. We must have private enterprise with solutions, government involvement that kills private enterprise, government incentives to codify and standardize processes and procedures, and then a whole new wave of private enterprise that operates according to some statute to protect consumers. Are we there yet? Not quite.
It has only been 4 years and by most indicators, the housing market is not "recovering". And even if it were to be deemed recovered tomorrow, that does not instantly fix the value problem with a record number of homes that, while not in foreclosure, are seriously under water. Based on historical average appreciation trends, homes in Arizona will not recover lost value from the declining years for a decade or more. Anybody who needs to sell in the couse of value recovery will not be able to without bringing cash to close or settling with their creditor in the form of a short sale.
Because we are just getting started, it is important to settle in and alter your expectation. Buyers, Sellers, Agents, Lenders and anybody else in this housing market, short sales will get easier again, don't despair. It is a market condition, and like any industry it will work itself out through endeavoring individuals, businesses and institutions who patiently persevere... just about the time that the market shifts again. For now, press on for the long road ahead.
1 comment:
Interesting ... I don't know if I would say short sales were overall easier in 2007 ... some things were, some weren't. For example, remember calling USAA and them telling you that they don't do short sales, and have never even heard of them? I think ours was the first they did (in this cycle)! Mind you, USAA haven't really improved their process much ... Anyway, they were definitely different.
I guess what I took away from your post is that back then it was more pure market economics, and now we have all sorts of government (and other entities) involvement, a lot of which is not helpful. That said, I certainly don't miss Bank of America not having their act together, and hanging up on you if they didn't like what you had to say. They have come A LONG way (baby). Many others have as well. Another improvement today is LOTS of precedent. We can refer to previous transactions both for the sake of our Clients and to help Lenders along. In the past ... it was ALL about trailblazing.
And than you for the short sale / stock reminder - I totally forgot that this is what everyone was thinking!
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