Special Message for long time Harris Real Estate University Students:

2010 WILL be the year of the short sale. As many of you know, because you are listing and selling short sale for years now. You are ready for what is coming in 2010.

Now, build your listing inventory. Do this, double, triple…maybe even quadruple the number of listings you have.

Go into spring 2010 will dozens (in not hundreds) of listings. Everything is going to make 2010 the year of the short sale. Did you miss the Emergency Short Sales Secrets event? Listen to this 90 minute Agent Short Sale Secrets teleconference replay now.

Here is an article from Diana Olick on CNBC.

Home prices may be stabilizing in some areas in the nation, but the damage has already been done in the housing markets that saw the biggest boom and in turn the biggest bust.

Home buying in these markets reached a frenzied pace during the middle of this decade, and that means that a good portion of buyers purchased homes at the top of the market. No surprise that they have now sunk deepest underwater on their mortgages.

A new survey from Zillow.com shows that even in those markets where investor competition has returned and prices on the low end are beginning to stabilize, homeowners still owe far more on their mortgages than their homes are currently worth.

What does this mean to agents? Simple…knowing how to list and sell short sales in now a mandatory skill. For years (and years) agents who have become Certified Short Sale Specialists will have an advantage over agents who don’t. Watch the FREE Agent Short Sale Secrets video and then download your FREE Agent Short Sale Secrets book.

Las Vegas leads the way with 81.8 percent of borrowers underwater on their loans in the third quarter of this year, down barely one percent from the second quarter but still up 10 percent from the first quarter.

The bulk of underwater borrowers are in California, Florida, Arizona and Nevada. While home prices nationwide were down 8.5 percent in September from a year ago, prices in these states are still way down — 34 percent in Las Vegas, 26 percent in Orlando, 23 percent in Phoenix and 11 percent in Los Angeles (National Association of Realtors). Again, that’s from a year ago, but many of these cities have seen over 50 percent price declines from the peak of the market.

We have been hearing from our students in these markets that homes less than $200,000 are selling with multiple offers….keep in mind that many of these homes sold at the peek of the bubble at 30-50% HIGHER prices!

Some argue that “underwater” borrowers are no different than any other borrowers, as long as they continue to make their monthly mortgage payments, and as long as they continue to want to live in their homes, knowing they will have to wait out the market for home equity to gradually return.

Not sure about that one….there have been several studies that have suggested that most will abandon their homes (selling via short sale of simply ‘walking away’) once their home is 20% upside down. Look at the stats for Vegas…81% of all borrowers are upside down! As our Vegas students have reported to us, its common for a home owners to sell their current home via short sales and simply (and sometimes literally) move across the street.

But the danger is for those that need to sell, or for those who can no longer afford their monthly payments and don’t qualify for a loan modification.

The government mortgage rescue programs do allow for modifications and refinances on homes with up to 25 percent negative equity, but many homeowners, especially in the hardest hit regions, don’t think they will ever see equity again, and therefore see no reason to continue making payments on their loans, whether they are able to or not.

Many are simply sitting in their homes, rent-free, as banks struggle to catch up and contact them. Others are vacating the homes, mailing in the keys, and choosing a credit hit, rather than be strapped to a home that will only ever be a liability.

Remember, several reports have estimated that the number of bank controlled ‘Shadow Inventory’ homes is….13,000,000.

Home prices are improving, but there is a lot of government stimulus behind that improvement. The extension and expansion of the home buyer tax credit, as well as artificially low mortgage rates backed by the Federal Reserve’s purchase of GSE loans and securities, will all expire by the middle of 2010, so it remains to be seen whether the very tenuous recovery we are now seeing in housing can endure on its own.

As foreclosures and unemployment continue to rise, the potential for a double dip in home prices is very real, and borrowers underwater now will only sink deeper.

Solution, Short Sales! Agents, learn how to become Certified Short Sale Specialists. Watch the FREE Agent Short Sale Secrets video and grab your FREE Short Sale Secrets book!

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