Foreclosures and short sales in the Baltimore market
Four out of every 10 homes sold in Baltimore City during the first four months of the year were distress deals -- foreclosures or short sales.
That's a lot of distress working its way through the housing market.
The numbers come from an analysis of Metropolitan Regional Information Systems data by the Greater Baltimore Board of Realtors, a slice of which appeared in my mortgage delinquency story last week. I thought you might be interested to see more of these stats.
Foreclosures were significantly more popular among buyers than short sales, which isn't surprising given the uncertainty about how long banks will take to respond to short-sale offers. (The "short" in "short sale" refers to selling for less than the mortgage balance, not a nod to the time involved.) Across the Baltimore metro area, 23 percent of homes sold in the first four months of the year were foreclosures, compared with short sales at 8 percent.
It's an even bigger difference in the city. Foreclosures accounted for 35 percent of sales; short sales were 6 percent. (I'm assuming that interest in city foreclosures as real estate investments is driving those numbers.)
Here's a really interesting finding:
Foreclosures made up a much smaller part of the market that was for sale at the end of April than their share of the solds in the first four months of the year. Fewer available at the height of the spring market than beforehand? Or are buyers snapping up foreclosures while non-distress sales languish?
Whichever, foreclosures were 5 percent of the Baltimore region's active listings at the end of April, vs. 23 percent of the sales from January through April. (Short sales, by contrast, were 10 percent of the active listings and 8 percent of sales -- pretty close.)
Here's the breakdown of foreclosure sales as a percentage of the total market in 2009 vs. the first four months of 2010, which shows an unmistakable trend:
Anne Arundel County: 10 percent // 19 percent
Baltimore City: 22 percent // 35 percent
Baltimore County: 11 percent // 19 percent
Carroll County: 10 percent // 17 percent
Harford County: 10 percent // 23 percent
Howard County: 8 percent // 15 percent
The Greater Baltimore Board of Realtors also looked at Prince George's County, just for perspective. That's one of the state's foreclosure hot spots. In 2009, foreclosures accounted for 34 percent of home sales. In the first four months of this year? Up to 54 percent.
There's a great deal of debate about what will happen to the homeowners currently trying to avoid foreclosure. John Burns Real Estate Consulting, a housing-market research firm, expects that most loan modifications won't succeed long-term.
With that in mind, the company has estimated the "shadow inventory" -- currently struggling borrowers whose homes will become future foreclosures -- at 53,000 in the Baltimore metro area. That's 14 months of supply, assuming a sales pace that matches the 10-year average, said Wayne Yamano, a vice president at the company.