Kirk Rau

After reading this you will have a much better undersanding of the role short sales played in the Pierce County real estate market last month.

Before I get into the numbers I feel it's important to draw some lines in the sand. Foreclosure is not a day or an event, it's a process. A Short Sale happens when a bank accepts less for the sale of a home than the loan balance. A Distressed Property is one that the owners occupy and at least on payment is late or is going to be late in the very near future. Properties are first Short and/or Distressed and then, if not sold before auction day, usually (today) become a bank-owned property and go back on the market. Pierce County is no different from the rest of the nation. Pierce County has enough of these to have a SERIOUS impact on pricing behavior.

I look at the numbers every month for three reasons: So that I know exactly what is happening today and can give my buyers and sellers the BEST advice, so that I can adjust my business to the market of the moment, and so that I sound really smart at cocktail parties.

Let's dig deep into the numbers below. In the Puyallup real estate market, on the day I did this report, there were 855 Active listings, 708 were NOT short sales, 147 were short. So, 17.19% of the market on that day was a short sale. Let's jump to closings. For the month ending December 3 there were 63 residential closings in Puyallup, 50 were not short, 13 were short. This means that 20.63% of the closings were short sales. Hmmm.

You might be a rosy glasses REALTOR or homeowner and say "Hey, that means that 80% of the market is NOT short. Sweet!" And to that I would say, "ONLY 17.19% of the total market was short AND 20.63% of the closings were short sales. That means Pierce County Short Sales are actually leaving the market faster than they are accumulating (this month anyways)." The 'not short' listings made up 82.8%, whereas 79.2% of the closings were 'not short'.

Pierce Puyallup Tacoma Spanaway

Active Total 6284 855 1830 346
Active Not Short 5468 708 1550 280
Active Short 816 147 280 66
% Short 12.98 % 17.19 % 15.30 % 19.07 %

Pending Total 1021 160 288 86
Pending Not Short 766 106 204 58
Pending Short 255 54 84 28
% Short 24.97 % 33.75 % 29.17 % 32.56 %

Sold Nov. Total 375 63 137 42
Sold Nov. Not Short 311 50 112 32
Sold Nov. Short 64 13 25 10
% Short 17.06 % 20.63 % 18.25 % 23.81 %

Inventory ALL 16.78 months 13.57 months 13.36 months 8.24 months
Inventory Not Short 17.58 months 14.16 months 13.84 months 8.75 months
Inventory Short 12.75 months 11.31 months 11.20 months 6.66 months

Consumption Rate ALL 16.24 % 18.71 % 15.74 % 24.85 %
CR Not Short 14.00 % 14.97 % 13.16 % 20.71 %
CR Short 31.25 % 36.73 % 30.00 % 42.42 %

Consumption Rate is a numerical figure that indicates the rate at which properties are leaving the market. Consumption rate is current pending sales divided by all active. It seems that there is a glut of Pending Short Sales as the percentage of the total Pendings that are short sales is a much higher number than both active shorts and closed shorts. Yep. This just tells us what we already know...short sales spend more time pending than non-shorts.

The message from all this madness? Call Pierce County Short Sales are closing.