A short-sale listing is one in which the owner still owns the property, but owes more money on his mortgage than he will get from selling the property. Short sales require the seller’s bank to agree to the final sale price. If more than one bank holds a mortgage on the property, each bank has to approve the sale.

Short sales are different than foreclosures or bank-owned properties. If the home-owner cannot sell the home through a short sale, the bank initiates foreclosure to try to sell the home directly, often in an auction. If the auction fails to turn up a buyer willing to pay at least what the bank was owed on the home, the home becomes Real Estate Owned (REO), where the owner is the bank. The bank then typically sells the property through a real estate agent.

If you are planning to make an offer on a short-sale listing, you should be ready to wait as long as one year for the banks involved in the process to approve or reject your offer. Many types of short sales are a long-shot. If you make an offer on one, you may want to continue touring and considering other homes in case the short sale does not go through.

Because the chance of success on short-sale offers is extremely low, TheLARealEstateTeam.com does not support short-sales for tours or offers.

According to Inman News;

The California real estate market continued to perform at the extremes in January — the rate of sales for resale single-family homes soared 100.8 percent while the median price sank 40.5 percent compared to the same month last year, according to the California Association of Realtors.

A separate set of data released by the state Realtor group and a data company — which includes median price info for more than 300 cities, counties and city areas throughout the state for all housing types — found that the median price dropped in all but one area in the state from January 2008 to January 2009 and dropped more than 50 percent in 26 cities and city areas. The price remained flat in Los Angeles County’s Woodland Hills.

The California Association of Realtors also reported today that the seasonally adjusted annualized rate of sales for single-family detached resale homes in the state, at 629,940, moved up 14 percent compared to December 2008 while the median single-family price dropped 9.5 percent in one month (to $254,350).

James Liptak, CAR president, noted that the annualized sales rate — a projection of monthly sales over a 12-month period, adjusted to account for typical seasonal fluctuations in sales activity — reached its highest level since October 2005.

“A lot of attention has rightfully been directed toward the high number of distressed properties,” said Leslie Appleton-Young, vice president and chief economist for the statewide Realtor group.
She said that the credit pinch on jumbo loans in the state has also impacted the real estate market.

“Since the start of the credit crisis in 2007, jumbo lending has been severely constrained to the point where markets that rely on jumbo loans experienced a 24 percent year-to-year decline in sales in the month of January,” she stated, in contrast to the state’s nearly 101 percent overall gain in the sales rate.

The sales rate for condos dropped 18.3 percent from December 2008 to January 2009 but rose 58.2 percent year-over-year in January, and the median price of resale condos in California slipped 7.2 percent from December 2008 to January 2009 and fell 41 percent year-over-year in January, CAR reported.

CAR reported that the sharpest sales-rate increase for resale single-family homes was in the High Desert region of the state, up 234.6 percent year-over-year in January, followed by the Monterey County region (213.5 percent) and the Riverside/San Bernardino region (149.4 percent).

On the other side of the spectrum, the sales rate remained level in the Santa Barbara South Coast region, rose 10 percent in the Northern California region and was up 20.3 percent in the Santa Cruz County region in January compared to the same month last year.

The median price between January 2008 and January 2009 dropped most in the Monterey region (-54.6 percent), followed by the Monterey County region (-54.5 percent) and the Palm Springs-Lower Desert region (-52.1 percent), while falling least in the Northern California region (-17.3 percent), the North Santa Barbara County region (-22.7 percent) and the Santa Barbara South Coast region (-24.7 percent)

Other statistics released by CAR and research company DataQuick Information Systems, which covers median home-price changes for all new and resale homes and condos in 331 cities and communities in the state from January 2008 to January 2009, found that prices dropped the most in San Juan Capistrano (-69.6 percent) from January 2008 to January 2009.

Richmond (-67 percent) was next on the list, followed by San Bernardino (-64.2 percent), Adelanto (-61.8 percent), Oakland (-59.7 percent), California City (-58.7 percent), Joshua Tree (-56.7 percent), Bloomington (-55.5 percent), Palmdale (-55 percent), and San Pablo (-54.5 percent).

At the other end of the spectrum, the median price remained flat in Woodland Hills and declined the least in Irvine (-0.2 percent), San Pedro (-1 percent), Claremont (-1.9 percent), Stevenson Ranch (-2.1 percent), Huntington Beach (-2.6 percent), Tujunga (-2.7 percent), Dixon (-3.9 percent), Grass Valley (-4.1 percent), and West Sacramento (-4.8 percent), CAR and DataQuick reported.

A CAR index that tracks the inventory of for-sale homes was 6.7 months in January, down from 16.6 months in January 2008. A supply of six months is considered to indicate a rough equilibrium between a buyer’s market and seller’s market, with supplies greater than six months leaning toward a buyer’s market. It took a median 49.9 days to sell a single-family home in California in January 2009, compared with 70.8 days in January 2008, CAR also reported.

La Jolla, in San Diego County, had the highest median home price ($941,000) in January among cities and city areas tracked, followed by Santa Barbara ($939,250), and Beach Cities in Southwest Los Angeles ($744,000). Kern County’s California City had the lowest median price in January ($66,500), followed by Desert Hot Springs ($89,500), and Adelanto ($93,750).

Home sales increased 84.9 percent in December in California compared with the same period a year ago, while the median price of an existing home fell 41.5 percent, C.A.R. reported yesterday. “Sales continue to be strong, exceeding 500,000 units for the fourth consecutive month, and year-to-date sales are nearly 27 percent above last year,” said C.A.R. President James Liptak. “California home buyers benefited during the last half of 2008 from the high-cost loan limit of $729,750, which fell to $625,500 as of Jan. 1. The restoration of the high cost loan limit to the previous level would not only help a housing market still struggling to turn around, but also make financing more affordable for home buyers.”

Closed escrow sales of existing, single-family detached homes in California totaled 544,580 in December at a seasonally adjusted annualized rate, according to information collected by C.A.R. from more than 90 local REALTOR® associations statewide. Statewide home resale activity increased 84.9 percent from the revised 294,520 sales pace recorded in December 2007. Sales in December 2008 increased 5.9 percent compared with the previous month.

The median price of an existing, single-family detached home in California during December 2008 was $281,100, a 41.5 percent decrease from the revised $480,820 median for December 2007, C.A.R. reported. The December 2008 median price fell 2 percent compared with November’s revised $286,850 median price.

Los Angeles, California (PRWEB) January 12, 2009 — PropertyShark.com, the premier real estate data site, today released its quarterly report covering first-time residential foreclosures in Los Angeles, Miami, Seattle and New York City for the fourth quarter of 2008. (NOTE: This report covers aggregate foreclosure levels, to view individual foreclosure listings in an area, go to http://www.propertyshark.com/mason/Foreclosures/index.html?utm_source=pr&utm_medium=pr&utm_campaign=0109forcs)

Los Angeles, New York City, Seattle, and Miami Foreclosures Q4 08

Key findings:

• Los Angeles foreclosures jump 69% over Q4 2007, but drop 29% from Q3 2008 - New foreclosures in Los Angeles decreased 29% in Q4 2008 (11,232 new foreclosure auctions) compared to Q3 2008 (15,763), predominately due to the foreclosure state law that went into effect in September 2008. However, the number of new foreclosures was extremely high in December 2008, 110% higher than in October 2008, when the initial effects of the law were seen.

“In Los Angeles, the 110% increase in new foreclosure auctions in December over October is troubling,” stated Bill Staniford, CEO of PropertyShark.com. “Typically we see a slowdown at the end of the year due to the holidays and instead we see spike upwards.”

• Miami foreclosures increase by 18% over Q4 2007, but drop 10% from Q3 2008 - In Q4 2008,foreclosures in Miami continued to drop, with new foreclosures (2,290) 10% lower compared to Q3 2008, but still 18% higher compared to Q4 2007.
• Seattle foreclosures drop 12% from Q4 2007 and 37% from Q3 2008 - Seattle had 318 newscheduled foreclosure auctions in Q4 2008, down 37% from Q3 2008, and down 12% from Q4 2007.
• New York City foreclosures up 25% over Q4 2007, but drop 32% from Q3 2008 - In Q4 2008, newforeclosures in New York City dropped to the lowest level of the year. The current number (764) was down 32% from Q3 2008, but was still up 25% compared to the same quarter last year (611).
• Foreclosures in Queens jumped 84% in comparison to Q4 2007, while other boroughs decreased.The largest decline in foreclosures occurred in the Bronx (down 53%), followed by Brooklyn (down
  23%) and Manhattan (down 19%).
• The number of investors buying properties at auction increased in Queens. Twenty-three percent

(23%) of properties auctioned in Queens in Q4 2008 were bought by independent buyers, compared
to only 16% sold to independent buyers in Q3 2008, with the rest going back to the lender.

“While the state foreclosure law and the winter holidays helped New York City foreclosures drop to their lowest quarterly level of the year, the fourth quarter of 2008 jumped 25% compared to the same quarter last year” stated Staniford. “Beyond foreclosures, we are also seeing the inventory of New York City property for sale rise to decade high levels”.

According to http://www.reuters.com/ By: Julie Haviv

NEW YORK (Reuters) - Prices of U.S. single-family homes plunged a record 17.4 percent in September from a year earlier, according to a key S&P index released on Tuesday.
The composite index of 20 metropolitan areas fell 1.8 percent in September from August, according to the Standard & Poor’s/Case-Shiller Home Price Indices, and a co-developer of the index said rising unemployment makes the outlook for the hard-hit U.S. housing market even bleaker.

S&P said in a statement that its composite index of 10 metropolitan areas declined 1.9 percent in September from August for an 18.6 percent year-over-year drop, also a record.
Declines in home prices in most areas were greater in September than in August, S&P said.
“This is a pretty gloomy report,” Karl Case, co-developer of the index and a professor of economics at Wellesley College, said on a conference call following the release of the report.
And because the Standard and Poor’s S&P/Case-Shiller Home Price Indices has not yet accounted for several important factors that have worsened in recent months, led by unemployment, the outlook is darkening further.

“Unemployment is rising rapidly, a primary factor that causes foreclosures to rise and home prices to decline,” Case said.
“Plus, some people cannot even get a loan due to the credit crunch, so there are a lot of factors out there that have not even hit these home price numbers yet,” he said.
The U.S. housing market is currently suffering the worst downturn since the Great Depression. A huge supply of unsold homes, tighter lending standards and record foreclosures have pushed down home prices, deflating a bubble from the early part of this decade.

The U.S. economy is considered to be either in or on the brink of a recession, and most economists and experts contend that an end to the downward spiral in housing prices is crucial to any recovery.
“House price declines have been at the root of the financial crisis and it appears, as of September, that this decline continued unabated,” said Lawrence J. White, professor of economics at New York University’s Stern School of Business.
“Until we have some kind of stabilization in the house price sector, we will continue to see problems in the financial sector,” he said.
“House prices will probably drop another 10 percent, but I am hopeful that a bottom will be reached in the late spring of 2009,” he said.
The rate of home price declines has accelerated on a quarterly basis, too.
In the third quarter, the decline in the S&P/Case-Shiller U.S. National Home Price Index — which covers all nine U.S. census divisions — remained in double digits, posting a record 16.6 percent decline versus the third quarter of 2007. This has worsened from annual declines of 15.1 percent and 14.0 percent, reported for the second and first quarters of the year, respectively. 

The U.S. National Home Price Index dropped 3.5 percent in the third quarter from the second quarter.
“The turmoil in the financial markets is placing further downward pressure on a housing market already weakened by its own fundamentals,” David M. Blitzer, chairman of the Index Committee at Standard & Poor’s, said in a statement.

As of September, S&P’s 10-City Composite is down 23.4 percent from its peak, the 20-City Composite is down 21.8 percent and the National Composite is down 21.0 percent.
Looking at the returns of the U.S. National Index, prices are back to where they were in early 2004.
Phoenix was the weakest market, with an annual decline of 31.9 percent, followed by Las Vegas, down 31.3 percent, and San Francisco, down 29.5 percent. Miami, Los Angeles, and San Diego did not fare much better, with annual declines of 28.4 percent, 27.6 percent and 26.3 percent, respectively.
New York, buoyed by plentiful jobs and big bonuses in the financial sector in recent years, showed a more modest annual decline of 7.3 percent.
But rampant layoffs in the financial sector are going to weigh heavily on home prices in the New York area, Case said.

“Home prices in New York will probably get worse, as it is vulnerable to the contraction in the financial services sector, so the layoffs will probably have a major impact,” he said.

According to Reuters on October 31st, 2008

Nearly one in five U.S. mortgage borrowers owe more to lenders than their homes are worth, and the rate may soon approach one in four as housing prices fall and the economy weakens, a report on Friday shows. About 7.63 million properties, or 18 percent, had negative equity in September, and another 2.1 million will follow if home prices fall another 5 percent, according to a report by First American CoreLogic. The data, covering 43 states and Washington, D.C., includes borrowers nationwide, even those who took out mortgages before housing prices began to soar early this decade. Seven hard-hit states — Arizona, California, Florida, Georgia, Michigan, Nevada and Ohio — had 64 percent of all “underwater” borrowers, but just 41 percent of U.S. mortgages… U.S. home prices fell a record 16.6 percent in August from a year earlier, with declines in all 20 major metropolitan areas measured by the S&P/Case-Shiller Home Price Indices. Foreclosure filings rose 71 percent in the third quarter to a record 765,558, according to RealtyTrac.

Meanwhile, the Commerce Department said gross domestic product fell at a 0.3 percent rate in the third quarter. Some experts expect the worst U.S. recession since the early 1980s.