Short Sales on the Increase in Greater Phoenix

What is a short sale? It's a sale where the bank or lender holding the note, or mortgage on the property, accepts less than what is owed. Some of my clients jokingly ask why it's called a short sale because it oftentimes takes weeks, even months, for the lenders to approve the short sale. Kind of an oxymoron. But the term "short" is because the seller is coming up short of what they owe.

Short sales have been on the rise since the housing market started its downward spiral. A lot of property owners -- due to loss of income and financial hardship -- are attempting short sales as an alternative to foreclosure or just walking away from the home.

Consider this...in September, 2008, approximately 2% of closings were short sales or 1 out of every 50 closings. In October, 2008, about 3% or 1 out of every 33 closings was a short sale. In January, 2009, short sales rose to 9% or one out of every 10 closings. In October, 2009, short sale closings were 19% or 1 out of every 5 closings. In June 2010, short sales accounted for 24% or 1 out of every 4 closings. It is expected that sometime in 2011, short sales may rise to 33% or 1 out of every 3 closings in the greater Phoenix market.

This statistical information provided courtesy of Fletcher Wilcox, VP of Business Development at Grand Canyon Title Agency in Scottsdale, Arizona.