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The U.S. Dept. of Housing and Urban Development recently announced a new agreement with the nation’s top mortgage lenders to offer select state and local governments, including California, and nonprofit organizations a “first look” or right of first refusal to purchase foreclosed homes before making the properties available to private investors.

The National First Look Program is the first-ever public-private partnership agreement between HUD and the National Community Stabilization Trust and is intended to give communities participating in HUD’s Neighborhood Stabilization Program  a brief exclusive opportunity to purchase bank-owned properties in certain neighborhoods so the homes can be rehabilitated, rented, resold, or demolished. 

More information at: http://portal.hud.gov/portal/page/portal/HUD/press/press_releases_media_advisories/2010/HUDNo.10-187

200 homes closing escrow last month in El Dorado County. 67 were bank owned REOs and 46 were short sales. It was a record number of monthly sales for both categories. The number of monthly short sales has doubled since last year. Lenders are more receptive to negotiating a discounted payoff of their mortgage rather than foreclosing on the property. Both sellers and their agents are capitalizing on this opportunity. Of the 1,400 homes currently listed for sale, 400 are short sales; 200 without offers and 200 with pending offers waiting for the lender’s approval. REOs account for 157 active listings.

Although no shortage of REOs and short sales, the demand is driving sale prices above the listing price. Last month the $355,000 average selling price of a typical short sale and the $295,000 average selling price for an REO exceeded their average listing price by 101 percent. Multiple offers are common. In contrast, the average selling price of a non-REO, non-short sale home was $425,000, which was 94 percent of their listed price.

Discounting the inflated monthly sales numbers, attributed to one time tax credits, the most significant market change this summer is the number of sellers attempting to sell their home through a short sale process.  At best, negotiating a short sale with the ultimate decision maker, the lender, is a frustrating time-consuming process that can go sideways for a variety of reasons. Currently, more than one of every four listings is marketed as a short sale.

Other information and data for the Placerville, El Dorado County, California areas is available at www.sierraproperties.com