An interesting question was posed by a reader who observed the incredibly high number of pending sales vs active listings in Antioch.  Are those pending sales largely short sales caught in the incredibly lengthy process of obtaining bank approval?

The answer is YES, short sales are skewing the pending sale number in every town.  Most notably in Antioch, where today there are 209 active listings (of which 66 are bank-owned and 97 are short sales) with 588 pending sales, 358 of which are grinding through the long hideous short sale process at the bank.  Of the others, 97 are regular sales and 133 are bank-owned.

But it’s not just in Antioch that the pending sales are skewed by short sales.  It’s been bothering me in Alamo as I watch the pending sale number grow and then realize it probably isn’t as meaningful as I would like when short sales are considered.

In Alamo today we have 106 active listings, 9 of which are REOs and 11 that are short sales.  With 32 pending sales, 3 are bank-owned and EIGHT are short sales.  That’s 25% of our pending sales that are just sitting there “awaiting bank approval” that may or may not close in our lifetimes.

My cynical attitude about short sales comes from a few bad experiences.  Twice I’ve had short sales listings with offers that sat at the bank for over 9 months, only to be rejected.  The first time was two years ago, a house in Blackhawk: after 9 months of waiting (a case of the 1st and 2nd being on different schedules), we gave up and took it off the market.  The owner tried again to short sale the house (with a realtor that specializes in short sales and my blessing), with the same results.  Now–literally two years later–two years since a mortgage payment has been made–the house again showed up on the MLS as a short sale.  I called the owner, a delightful person that I wanted to catch up with, to find out how this could be.  The locks had been changed, the house is vacant, but the banks still can’t seem to wrap this up.  I’ll be curious to find out how (and when) this story will end.

A case like this may not be the norm, but it is pretty amazing.  Some banks have a great system (Wachovia, for sure!) and are processing short sales effectively.  In fact, so far this year in Alamo, we’ve had nine short sales close escrow successfully (eventually).

Thanks for posting the great question, JP!