Fannie and Freddie Short-Sales

Where’s all the short-sales?  If you’re a first time home buyer in Seattle and you’re wondering where all the inventory is, you’re not alone.  Transaction types in King County are down across the board, including short-sales.

I thought there was supposed to be tons of distressed properties out there?  One of the reasons short-sales are not coming on the market is that many financial institutions require that a homeowner miss multiple payments before they’ll even review a homeowner’s request for a short-sale.  Homeowner’s may be hesitant as missed payments will lower their credit score.

Will more short-sales come on the market in the future?  They might.  Starting November 1st, Fannie Mae and Freddie Mac will start to review short-sale requests even if the owner is CURRENT on their mortgage.  This may allow for more inventory to come on the market, therefore giving first time home buyers more houses to choose from.

So will we see another dip in the Seattle market?  With signs of a housing recovery and potential appreciation on the horizon, many underwater homeowners that aren’t FORCED into default may continue to make their payments and wait the decline out.  So even though this new change may put some much needed inventory into circulation it may not be enough to cause a continuing decline in Seattle area housing values.

Don’t buy your first home before getting educated!  If you’d like to find out more about the Seattle housing market or general information about becoming a first time home buyer go to our Calendar/Reservations page and sign up for one of our First Time Home Buyer/Down Payment Assistance workshops.

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