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How many short sale listings are there in Silicon Valley right now? Silicon Valley is primarily covered by Santa Clara County with a bit in Alameda, Santa Cruz and San Mateo Counties. Today we'll just focus on Santa Clara County, which is a large area covering about 1.8 million people and includes San Jose as its biggest city with about 1 million residents.
Distressed Sales in Santa Clara County
as of Sept 25, 2010:
30% of Inventory is Short Sale or Bank Owned Homes
| Available homes for sale in Santa Clara County |
4800 |
| Homes listed on the MLS as "Short Sales" |
1266 |
| Homes listed as Bank Owned Properties (REOs) |
478 |
As of Sept 25, 2010, there are exactly 4800 houses, duet homes, condominiums and townhouses for sale (but not yet under contract, not sale pending) which are listed on the MLS as available. Of those, 1266 are short sales and 478 are bank owned properties or REOs, so a total of 1444 are "distressed sales", and that's 30% exactly of the available inventory. This does not count those who are for sale with a missed payment or who have a notice of default filed but do have enough equity in their properties to close escrow without asking the bank to get shorted in the process. The true number of distressed sales is a bit higher than 30%.
Of the pending sales, how many are REOs or short sales? Distressed sales are about 70%!
Pending Sales in Santa Clara County as of Sept 25, 2010
| Homes under contract in Santa Clara County |
3760 |
| Short sale listings which are sale pending |
2300 |
| Pending sales of REOs |
330 |
The pending short sales make up a whopping 61% of all pending sales. (But will they close escrow?) Bank owneds, by comparison, hold a modest 9% of the homes under contract.
Most importantly, what is actually selling and closing escrow? Let's see what has happened in the last 30 days.
Santa Clara County Home Sales by Type,
closed in last month
| All sale types |
1178 |
| Short sales |
246 |
| Bank owned |
180 |
Here's where the rubber hits the road. Of the 1178 houses, duet homes, condos and townhomes that closed escrow in the last month, 21% were short sales and 15% were REOs. So the total amount of distressed real estate that's actually selling (as opposed to getting under contract) is about 36%.
What is causing this crazy discrepancy between one type of sale in Silicon Valley and another? In large part, it's the high fallout rate for short sale transactions. Many, many things can derail a sale in a short sale: the bank may not approve the sale price, the buyer may get tired of waiting, the seller may not agree to the bank's terms, the bank may foreclose before the sale can go through, if there are multiple loans with different lenders, the 2nd or 3rd leinholders can decide they don't want to cooperate, the seller may decide to try for a loan modification and cancel the sale, etc. etc. etc.
Sales overall were up in August compared to July, but they are still sluggish. Interest rates are extremely affordable and in many areas (such as Los Gatos), home values have been increasing for the last year or so. What seems to be making buyers nervous is a threat of a second decline in the economy and home values combined with a fear of job loss or becoming under-employed.
Want to read more about Silicon Valley Short Sales? Here's a list of links to other posts on this site on this timely topic:
Los Gatos & Santa Clara County High End Homes in Default posted July 14, 2010
Absorption Rates for Los Gatos & Monte Sereno Real Estate Market in May 2010 (includes absorption rates of distressed properties) May 26, 2010
How Big of an Impact are Short Sale Listings on Los Gatos Homes for Sale? May 12, 2010
Are Short Sales on the Rise in Los Gatos? April 28, 2010
Los Gatos Short Sales: Snapshot of Today's Activity March 27, 2010
Are There Many Short Sale or Bank Owned Homes for Sale in Los Gatos? Nov 16, 2009
Are There Many Short Sale or Bank Owned Homes for Sale in Los Gatos? May 3, 2009
Distressed Properties in Los Gatos: How Many Are For Sale? Oct 2, 2008
Taking a Pulse of the Silicon Valley Short Sale Situation July 19, 2009
If you are thinking of buying or selling a distressed property in Los Gatos or anywhere in Silicon Valley, please call or email me for a confidential consultation. I can help you to understand the options you have (which are many) so that you can make the best choice.
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