Percentage of Distressed Sales in the Portland Market

Below is a graph made by the local multiple listing service showing the percentage of homes that are bank owned vs short sale, and compared to traditional transactions.  It's about 20-30%.  Remember a short sale, will likely become a bank owned, if it doesn't move into the SOLD category. 

Look at the size of the short sale listings that become a sale, vs the size of the bank owned that actually become a sale.  Most of the traditional listings that don't make it into the SOLDs, likely are home owners that decide now is not the time to sell, and they stay there.  However, most of the short sale sellers, that are unsuccessful at selling, still move.  When they move on, the house goes back to the bank.  And it will reappear again on the market. 

The inventory of bank owned will likely increase in 2011.  However, they have made their mark already in our marketplace.  Banks are interested in selling for fair market value these days.  It's the short sale sellers that are the motivated ones, that drop their price below fair market value, just to avoid foreclosure.  In these instances, these short sales are likely to fail and become bank owned.  It isn't truly new inventory added to the market.  It's actually the same house, now with a new owner, and typically, the price is fair market value.  The only grumblings are that we don't like what we see considered fair market value any more...