San Diego Short Sales Dying

Having been in the business for nearly 4 years now we have been akin to the trends of the short sale market in San Diego.  San Diego Short sales have dominated in markets such as Chula Vista, La Mesa, Spring Valley, and all over Rancho San Diego for the past few years but it wasn’t up until recently where we have seen the number of short sales decline.  Perhaps this is due to the Stimulus package president Obama set up to help or perhaps we are finally reaching the absorption phase of the real estate life cycle in San Diego.  Whatever it is, there is no denying that short sales in San Diego in general are seeing a steady decline in its numbers. 

Dynamics of a San Diego Short Sale
I have closed short sale deals in Florida, California, Nevada, Georgia, and North Carolina and have had to deal with a variety of different law structures but there is one constant.  Short sales can be a huge undertaking especially if they are not handled with care.  San Diego Short sales face an even greater hurdle because the prices of houses are generally more expensive here than they are in most parts of the country. 

In either case, San Diego short sales pose a different but obtainable challenge because for the most part the idea remains the same.  To convince the lender to sell below the principal balance on the borrower’s loan at a reasonable market value price.  This dynamic poses a large challenge in some parts of San Diego mainly due to the fact that in some areas in San Diego like Chula Vista, prices have dropped much more dramatically than say Point Loma.  Coupled with the time some lenders can take to process just the paperwork that upon completion the house has already declined in value and the original buyer has either found something bigger at a cheaper price or the appraisal cannot meet the value of the offer.

San Diego Real Estate Market For Short Sales
There is no denying that a house that winds up on the San Diego (Dowtown San Diego or El Cajon) courthouse steps (foreclosure) will cost the lender thousands of more dollars than if they had sold it below market value as a short sale.  Sometimes the amount of money saved could be in the hundreds of thousands depending on location of size of the house.  For this reason alone, more and more lenders as well as government officials have come up with different ways to help the borrower stay in their homes.  Whether it be a reduction in interest rate or modification of a loan lenders are working tirelessly to avoid foreclosures. 

Until these plans go into affect for San Diego Homeowners Lenders will to continue to lose millions of dollars from foreclosures.  However, we are already seeing that Short sales in San Diego have slowly but surely started to decline which is a good sign but there remains a lot of work left to do.