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Published: Monday, February 6, 2012, 12:01 a.m.

Half of county home sales were foreclosures or short sales

Nearly half of all single-family homes sales last year in Snohomish County was either a short sale or foreclosure, according to Washington Property Solutions, a short sale negotiating company based in Bellevue.
For the entire year, 7,771 single-family home sales were closed in the county, according to the Northwest Multiple Listing Service, a real estate organization that compiles home listings and sales information for 21 counties in Washington.
Distressed properties -- or those that are short sales or foreclosures -- accounted for 49 percent of the sales in the first and final quarters in 2011.
Those property sales accounted for 46 percent of home sales through the second and third quarters of the year, according to Washington Property Solutions, of Bellevue, which analyzed the listing service's information.
Distressed properties also made up half of all single family home sales for the year in Pierce County, and about a third of all sales in King County, according to the company.
While the percentage of short sales remained steady from 2010 to 2011, there was an increase in bank-owned property sales last year, according to Richard Eastern, founder of Washington Property Solutions.
"The bank has to do something with their inventory," Eastern said. "I can't emphasize enough that the large number and lower price of bank-owned sales pull down property values overall, causing more homeowners to be underwater and enter into short sales territory."
The number of distressed property sales in the report is higher than expected, said Glenn Crellin, associate director of research for the Runstad Center for Real Estate Studies at the University of Washington. State-wide data he has received from sources including the Mortgage Bankers Association reported a decrease in closed foreclosure sales in the last three quarters of 2011, compared to that of the two previous years.
Higher percentages of distressed properties in an area where the owner of a nondistressed property is hoping to sell can cause the homeowner to wait to sell, Crellin said.
"It is a clear drag on the market and it is a bigger drag on the market in some communities than others," he said.
There are about 76,000 homes in the state that are at least 90 days past due on mortgages or in foreclosure, Crellin added.
"There is some evidence that lending institutions are beginning to move more rapidly on distressed properties but it will take us a while to get through that so called shadow inventory," he said.
Short sale properties that sold last year included a 900-square-foot, $55,000 home in Lake Stevens and a 6,900 square-foot, $815,000 home in Everett. Sold bank-owned properties ranged from a 960-square-foot, $25,000 home in Arlington to an 8,600-square-foot, $1.9 million waterfront home in Edmonds. The median price of all single family short sale properties sold in the county last year was $217,000 while the median price of all single family bank-owned properties sold was $186,000.
Eastern said he expects the sale of distressed properties to continue to increase this year.
"This trend has been building," he said. "It is not a surprise and will continue to around for many years until the banks are able to reduce their portfolio of holdings significantly and the market has had a chance to recover."
Amy Daybert: 425-339-3491; adaybert@heraldnet.com.

Your story
If you and your family are currently going through a foreclosure, Herald photojournalist Sarah Weiser would like to hear your story. You can reach her at sweiser@heraldnet.com or 914-216-2154
Story tags » Real Estate

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