Short sales mean slow sales
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An illuminating take on short sales is contained in the just-released UCLA Anderson Forecast, should one care to tunnel down to page 99, where Ryan Ratcliff, forecast scholar and assistant professor at the University of San Diego, looks at ‘Inventory Indigestion.’
Seems that while Ratcliff was trying to move to that city this summer, he noticed that short sale listings made up a lot of the inventory but few of the sales. An admittedly imperfect parsing of 2008 MLS data for San Diego County supported his observation: short sales accounted for 36% of listings but only 12% of sales. ‘The short sale listing and its attractive price were essentially just an illusion,’ he writes.
The home shopper-economist also found that the time between listing and closing was almost six weeks longer for a short sale and that such listings are largely in the bottom half of the home price spectrum.
As short sales relate to the question of a housing rebound, he concludes, that they ‘have temporarily hijacked the market mechanism’ and that ‘the near-term course of the housing market will be determined more by the procedural timelines of foreclosures and short sale approvals than any notions of a magic price that will clear existing inventory.’
There’s nothing like a little field research.
-- Lauren Beale
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