by Bill McBride on 10/11/2013 03:23:00 PM
Friday, October 11, 2013
Economist Tom Lawler sent me the preliminary table below of short sales, foreclosures and cash buyers for several selected cities in September.
First, on short sales from CR: Look at the first two columns in the table for Short Sales Share. Short sales are down sharply from a year ago, and will probably really decline in early 2014. It appears that the Mortgage Debt Relief Act of 2007 will not be extended again next year. Usually cancelled debt is considered income, but a provision of the 2007 Debt Relief Act allowed borrowers "to exclude certain cancelled debt on [a] principal residence from income. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualifies for the relief." (excerpt from IRS). This relief expires on Dec 31, 2013. Complete all short sales by the end of this year!
Total "Distressed" Share. In most areas that have reported distressed sales so far, the share of distressed sales is down year-over-year (Hampton Roads is an exception). Also there has been a decline in foreclosure sales in all of these cities except Springfield, Ill.
The All Cash Share is declining in some cities (Phoenix and Las Vegas), but steady in other areas. When investors pull back in markets like Phoenix (already declining), the share of all cash buyers will probably decline.
In general it appears the housing market is slowly moving back to normal.
|Short Sales Share||Foreclosure Sales Share||Total "Distressed" Share||All Cash Share|
|*share of existing home sales, based on property records|