Even in Scripps Ranch where, relatively speaking, we have been somewhat resilient to the foreclosure and short sale mess, we are starting to be fed a bigger slice of the distress sale pie.
I get asked the question almost daily. How much impact do distress sales have on the market? We are talking, of course, about sales where the bank is controlling the outcome — either because they are in the position of approving a short sale or because they are now the owner outright. The answer is “a lot.” Now that we are seeing a measurable slice of our activity falling into the “subject to lender approval” category, these offerings are putting very real pricing pressure on the traditional sale offerings. And, once they sell, make no mistake; they become a very real “comp.”
Here is how the date breaks down. These numbers were pulled from the Sandicor MLS this morning and is for the 92131 Zip code. Keep in mind that the percentage of distressed properties shown are understated at best, since I relied on the listing agent having checked the box indicating affirmatively that the home is subject to lender approval. As we have discussed before, not every agent accurately reflects that a home is bank-controlled, and not every short-sale starts out that way.