Modesto, California – located 90 miles to the east of San Francisco – has endured more than its fair share of property foreclosures since the national housing crisis began to strike northern California as early as 2007. Financially distressed homeowners saddled with “under water” mortgages began to contact their lenders in masse as an increasing percentage of honest, hard-working people suddenly found themselves unemployed or burdened with an unsustainable debt.
This difficult economic environment in 2008 forced Modesto, CA property owners to make tough choices in order to avoid the costly and emotionally devastating foreclosure process, which could permanently scar their credit reports for years. Although, over 200,000 Modesto area homeowners (approximately 1 out of 8 housing units) have lost their homes to foreclosure from 2007-2009. The latest figures from the National Association of Realtors estimate that thousands more are in danger of defaulting within the next three months due to some manner of financial hardship.
As a result, the short sale market has boomed precipitously since mortgage lenders are more willing than ever to accept short sales over filing for a foreclosure. So with that in mind, here is a quick overview of the short sale real estate market in the Modesto, CA from the perspective of buyers and sellers respectively:
Buying Short Sales in Modesto, CA
According to Modesto, CA realtor Dan Phipps, “our local market is clearly moving from a strong seller’s market and transitioning into a buyer’s market”. For the last two years, the Modesto real estate market has gradually leaned in favor of buyers rather than sellers due to the drop in property values that caused many homeowners to fall into “upside-down” mortgages, which in essence amounts to owing more on a mortgage than the property is worth on the current market. For instance, 4 bedrooms, 3 baths, 3,500 square-foot Modesto, CA home sold for over $750,000 in 2008, but the same home in 2010 is currently listed at $625,000 and falling.
Conducting Short Sales in Modesto, CA
The reality of the Modesto real estate market as a whole is that conditions have remained relatively neutral despite the wave of foreclosed and short sales that flooded the market over the last two years. To put this negative trend in perspective, the expectation of more foreclosed properties to be seized later in 2011 actually makes conducting a short sale an increasingly viable option for both buyers and sellers alike.
