Short sales accounted for a record 19.6 percent of home sales last month, according to the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey.
These types of sales, which involve selling a home for less than the existing mortgage(s), were up from 17 percent a month earlier.
Overall, distressed sales, including foreclosures, accounted for nearly half (48.6%) of home sales in March, and are expected to rise in the months ahead as mortgage lenders work their way through the foreclosure backlog.
Meanwhile, the group’s so-called “HousingPulse Homebuyer Traffic Index (HTI)” registered a slowdown in both owner-occupant and investor activity during the month, attributed to things like bad weather and rising gas prices.
And a “significant number” of agents have noted that distressed properties are making it difficult to get accurate appraised values on non-distressed homes.
“Home values continue to decline, making normal sale homes worth much less than they should be. Appraisers continue to use distressed property sales to establish value on non-distressed listings,” said a Arizona-based real estate agent cited in the report.
Apparently, these same appraisers aren’t making adjustments for amenities, (pools, spas, solar, etc.) when comparing normal sale to distressed comparables.
Clearly this is making it difficult for sellers to get that “right value,” which will hamper sales and possibly extend housing crisis, especially if owners are on the brink of being underwater on the mortgage.