It’s a staggering number. Over 50% of current real estate sales now in San Diego are short sales or REO. The distressed properties are no doubt selling faster because their price is so low. But that will drive all prices down, forcing even more homeowners underwater on their mortgage, and the downward spiral will continue.
She gave me an example of a house that sold for $500K in 2005. The bank foreclosed and is now asking $380K – with no offers – and she believes it will eventually sell for $300K or less.