Now you see them, now you don’t.
In Scripps Ranch, we’ve been bouncing between approximately 100 and 120 active detached listings at any one time, give or take, for awhile now. As anyone who has been busy on the ultimate shopping trip knows, many of these homes were not really available. Short sales pending lender approval hang around on the active inventory list until the bank sees fit to bring closure to the process, and this typically occurs after three to six months of hand-wringing. No longer.
Our MLS recently added a new status field, the “contingent” property. Overnight, we went from 96 listings to 78; the difference represents homes for which an accepted offer has been submitted to the bank and the parties are waiting (and waiting, and waiting) for approval.
This much is a good thing — good as long as the listing agents fess up to the true status of being in a lender-controlled holding pattern. One problem is that many agents don’t, either by oversight or through a sadly popular practice of using the old “the seller didn’t sign the offer so it’s not really accepted” loophole. The latter is generally done with the idea that offers and, yes, buyer inquiries (or as some agents like to call them, “leads”) will continue to roll in for the better part of the next quarter while everyone is sitting around waiting for the loss mitigator to find the file.
There is another problem with the new contingent category, and this one may be a serious nail in the coffin for the poor guy who actually has his equity tied up in his current home or can’t afford to assume even short-term land baron status. That poor guy is most of us.
In the old days (two weeks ago), if a seller accepted an offer contingent on the buyer’s sale of his current home with the 24- to 72-hour “blow out” clause, the home would remain active in the MLS until the buyer either got his home sold or the seller found his better date. Now, contingent-on-sale homes are swooped into the purgatory of a contingent holding tank.
As sellers have had to actually break a sweat in this “buyer’s market,” we have seen sellers a little more inclined to entertain contingent offers from buyers. By rightfully addressing a real off the market situation with pending short sales but while lumping contingent-on-sale homes into this same category, I fear we have put an end to the silliness of trying to seamlessly move from one home to another without having to cart off the children, the gold fish, and all other worldly possessions to a fun, interim stay at the Residence Inn.
Here is what Yahoo! Real Estate shows this morning for one such home in Rancho Bernardo:
Bummer if you are the listing agent or the seller.
But now I’ll digress, and only because I have this pretty pie chart and I hate to waste it. We are still in a market of value seekers. While 28% of our active detached homes for sale in Scripps Ranch are of that lender-controlled type, almost 38% of the homes in escrow fall into that category.
One might argue this is a sign that we are absorbing the distressed properties and readying to move forward. One might also be wrong. Based on the calls we are getting and what we are seeing on the streets, I don’t think we are able to see around that corner just yet.
Enter Case-Shiller. From their 2009 1st quarter home price indices via the Wall Street Journal, the rate of decline is down in some areas. Woo-hoo!
Down, however, is still down.