The local Sacramento housing market likes short sales at a time when the foreclosure crisis is ending. Foreclosures in California have dropped to pre-2006 levels according to real estate tracking firm Data Quick.
This does not mean our housing market is healthy but homeowners finally have some good news. Prices are rising and the improving economy has reduced the number of foreclosures we are seeing. For those who want to sell a home where they still owe more than the house is worth, the short sale has become the preferred tool.
In 2012 short sales represented about a quarter of our sales in the Sacramento area and as we have moved into 2013 they are getting even more popular. Some of the reasons for this gain in use is improved lender processing.
Banks and other mortgage lenders like short sales because they lose less money than a foreclosure and have proven systems to handle the process. Lenders can now get a short sale approved in as little as 6 weeks compared to 6 months which is where we were a few years ago. For the homeowner, short sales are generally more acceptable than a foreclosure and have less negative impact on credit reports.
Finally, a short sale will only keep you from getting a new mortgage for 3-years where a foreclosure could keep you from financing a home for 5 or more years.
