According to a recent article in CNN Money (Home prices show stability after modest gain), short sales and foreclosures account for 50% or more of sales in some metro areas. The high level of sales are driven by the sheer number of homeowners behind on their payments – 14%+ in California and San Jose – and by the discounts buyers are finding in short sales and foreclosures. Short sales and foreclosures are averaging a 27% discount versus conventional sales according to a study by MIT economist Parag Pathak and Harvard researchers John Campbell and Stefano Giglio.
It looks like short sales and foreclosures will remain a significant portion of the San Jose, CA real estate market for the rest of 2010 and probably most of 2011. If you’re planning to purchase a home in San Jose, make sure your strategy includes short sales and foreclosures.