According to the recently released mid-month pricing update and forecast from the Cromford Report, sales prices continue to increase across the valley, REO inventory continues to go down and Short Sale homes for sale hits a new record high.
As REO inventories continue to decline the sales prices of both REO and short sale homes for sale have been going up. I would be surprised to see that change as we finish the 4th quarter of 2011.
As we go into 2012 with significantly less REO inventory than we had at the beginning of 2011 and as many of the distressed homeowners who actually pay a professional to prepare their tax returns next spring learn from those tax professionals that the The Mortgage Debt Relief Act of 2007, which generally allows taxpayers to exclude income from the discharge of debt on their principal residence and applies to debt forgiven in calendar years 2007 through 2012. Talk to your tax professional or visit the IRS website to see if you would qualify. I would not be at all surprised if in 2012 we saw a jump in the number of short sale homes for sale, if this takes place no doubt many of the buyers would be investors as REO properties have been a favorite for them the past couple of years and with that supply dwindling they will need inventory from somewhere.
This information is for informational purpose and not intended to be investment advise, and should be explained to you in detail. You should always feel free to consult an attorney and/or tax advisor to obtain further information you deem necessary. I want you to be prepared.