Short sales of residential real estate, homes typically worth less than the bank is owned, are rising dramatically as a percentage of all real estate transactions. The Federal tax incentive had kept the numbers lower through November but it seems those buyers are now out of the marketplace.
With the overhang of mortgages not being paid on and borrowers upside down I do expect to see more and more news along these lines in the coming months.
Short sales have jumped from about 10 percent of distressed property sales during most of last year to 15.9 percent of home purchase transactions in January.
By contrast damaged real estate owned or bank owned properties accounted for only 13.4 percent and move-in ready bank-owned accounted for 13.8 percent of all sales, according to the latest Campbell/Inside Mortgage Finance Monthly Survey of Real Estate Market Conditions.
As recently as November of 2009, short sales accounted for 12.4 percent of the home purchase market, behind move-in ready REO at 12.6 percent and nearly even with damaged REO transactions at 12.3 percent. via UPI
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Excuse my lack of knowledge but how does it happen that you can owe a bank more than the home you borrowed money from them to buy?
Is it interest?