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.
Ouch.
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.
Categories: Housing stats, The foreclosure mess
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Comments
Ouch. Thanks for that good piece of news in the morning Jamie! It is especially bad news for someone (Me) who would like to sell soon. It's not too big of a surprise though. My area was not too impacted by foreclosures until the last few months. I was surprised at how few there were, but they are making more and more of an appearance now. Should be great for my property value....
Posted by: M | May 25, 2010 7:45 AM
As an investor who purchases foreclosed properties, fixes them and resells them, it seems as if the Banks in the Baltimore region(or banks that just own properties in Baltimore) are under the assumption the market is back and are being foolishly stubborn on negotiations. For instance, I tried to purchase a property in cash and close within a week, I was literally only 4k from the listing price and the bank rejected my offer! I think if the Bank President knew the asset manager was doing this that asset manager should and would be fired!
Posted by: frustrated Investor | May 25, 2010 8:41 AM
Frustrated Investor,
If only you could go in and talk to George Bailey. Heck, you'd have better luck dealing with Mr. Potter than some of the money center banks that have strung along offers for 6 months only to fall apart over amounts of money less than a month worth of carrying costs.
What's the reason? Securitization prevents any person from really having the accountability and authority of the asset manager you envision. Quite often one entity owns the servicing rights and an entirely different entity owns the investor rights. The servicing entity deals with the borrower, but has zero authority to negotiate anything. Mortgage insurance companies add an additional layer of bureaucracy to the mix and their interests often conflict with the lender's. Even the entity that owns the servicing rights and the entity that owns the investor rights can have conflicting interests.
Posted by: Josh Dowlut | May 25, 2010 9:47 AM
Marcia Brady's bracelet is dangling as she tries to add just one more card to the house of cards...
Stock market is tanking, and individuals are watching their paper /digital wealth further dissipate. Home ATM is extinct. States and banks are insolvent.
M- want to sell soon? Sell now! - and consider yourself lucky to break even.
Frustrated - hold that cash - the two-for-one foreclosure sale is on the near horizon
remember - foreclosue and short sales are the cure, not the disease
Posted by: Darwin Rules | May 25, 2010 10:06 AM
Great so only in MD can someone have Cash Money to spend on Real Estate and because of the "Red Tape" issue I can't spend it? Fantastic, so basically less than savvy investors will pay full price for a property only worth half that currently, then still have to pay around 50k to rehab the house and then wind up foreclosing on the property AGAIN because they purchased the property much too high to begin with because the banks are bull headed or just flat out stupid! All this and I can't figure out for the life of me why the economy is in such poor shape! Oh wait.............
Posted by: Frustrated Investor | May 25, 2010 12:44 PM
So, if one wanted to buy a foreclosure & is just now having that brilliant idea, where is a good place to find properties in foreclosure?
Posted by: Hugh Jass | May 25, 2010 3:33 PM
Hugh, if you want to buy a home that's been foreclosed on by the bank and is now an REO (for "real estate owned"), you can find them on the multiple-listing service. A number of real estate search sites will let you look specifically at foreclosures.
If you want to buy at a foreclosure auction, you'd need to check out sites that list those auctions (such as the auctioneers' own sites).
Posted by: Jamie Smith Hopkins | May 25, 2010 4:57 PM
Hugh you can email me at jaybrown@execuhome.com I will be glad you show you Bank Owned properties anywhere in MD. No fee of course and you don't need to sign anything with me. I specialize in working with investors and Buyers.
Posted by: REO friendly Realtor | May 26, 2010 6:08 PM
I'm I the only one not taking seriously a comment made by someone going by the moniker "Huge Ass?"
Posted by: Anonymous | May 27, 2010 8:00 AM
Anon, if someone asks what appears to be an honest question, I'm going to take them at their word that they're not just looking for an excuse to slip a silly name into the mix.
Posted by: Jamie Smith Hopkins | May 27, 2010 8:46 AM