Created by Teal Clise, Vlad Kats
If you’re a homeowner in the Baltimore Metro area facing foreclosure, understanding the current real estate market can help you make informed decisions about your property. This update will provide insights into distressed property trends, including short sales and foreclosures (REOs), and offer guidance on navigating your options.
The State of the Market
The Baltimore Metro area has seen varying trends in closed sales over recent years. Comparing data from the same months across different years highlights these seasonal patterns:
- April 2024: 2,704 closed sales
- April 2023: 2,510 closed sales
- April 2022: 3,783 closed sales
While there has been a decrease in closed sales in April 2024 compared to April 2022, there has been a rebound from April 2023, indicating a potential recovery.
Distressed Properties: A Growing Trend
Distressed properties, including short sales and foreclosures, have significantly impacted the market. Understanding the prevalence of these properties can help you determine the best course of action.
Foreclosures (REOs):
- April 2024: 89 REOs (3.29% of total sales)
- April 2023: 56 REOs (2.23% of total sales)
- April 2022: 49 REOs (1.29% of total sales)
Short Sales:
- April 2024: 11 short sales (0.41% of total sales)
- April 2023: 19 short sales (0.76% of total sales)
- April 2022: 26 short sales (0.69% of total sales)
What This Means for You
The data indicates an increase in foreclosures and a decrease in short sales in April 2024 compared to previous years. If you are facing foreclosure, now might be an opportune time to consider a short sale. Here’s why:
- Market Conditions: The rising number of REOs suggests that more homeowners are struggling to keep up with mortgage payments. However, the relative scarcity of short sales means there may be less competition for selling your property this way.
- Financial Relief: A short sale can potentially minimize the financial impact on your credit score compared to foreclosure. It also provides a way to settle your mortgage debt with your lender’s approval.
- Faster Process: With fewer short sales currently on the market, lenders may be more willing to expedite the process to avoid the lengthy and costly foreclosure process.
Future Outlook: Short Sales on the Rise?
It is also important to consider that the increase in REOs might indicate a forthcoming rise in short sales. REOs are often seen as a leading indicator for short sales. As more properties go into foreclosure and are repossessed by banks, lenders may become more proactive in negotiating short sales to mitigate losses and avoid the costs associated with managing and selling REOs.
Historically, when the market sees a surge in REOs, it often leads to an increase in short sales shortly thereafter. Therefore, if you are contemplating a short sale, acting now could position you ahead of a potential increase in the number of short sales, providing a competitive advantage.
Comparative Analysis
Looking at the data from the past three years provides a clearer picture of the trends:
- March 2024: 79 REOs (3.36% of total sales) and 13 short sales (0.55% of total sales)
- March 2023: 82 REOs (3.04% of total sales) and 14 short sales (0.52% of total sales)
- March 2022: 64 REOs (1.78% of total sales) and 18 short sales (0.50% of total sales)
This trend shows a slight increase in REOs from 2023 to 2024 and both have increased significantly compared to 2022.
Taking the Next Steps
If you’re considering a short sale, here are some steps to get started:
- Consult with a Real Estate Agent: An experienced agent can help you understand the process, evaluate offers, and negotiate with your lender.
- Prepare Your Home: Even in a short sale, making your home presentable can attract better offers.
- Gather Documentation: Be ready to provide financial documents to your lender to demonstrate your need for a short sale.
Conclusion
Navigating foreclosure is challenging, but understanding the current market trends in the Baltimore Metro area can help you make the best decision for your situation. With the rising trend in foreclosures and the potential benefits of a short sale, now might be the right time to explore this option. Additionally, considering that increasing REOs may lead to a rise in short sales, acting sooner rather than later could provide you with a significant advantage.
For personalized advice and support, contact Atlas Home Group. Our team of real estate and short sale experts is here to guide you through the short sale process and help you find the best solution for your needs.