Reporting Oren Liebermann
By Oren Liebermann
CHERRY HILL, NJ (CBS) – The five bedroom house on Maine Avenue in Cherry Hill was once the life of luxury.
“There was a Jacuzzi,” said neighbor Stephanie Chaplin. “They did have a pool, but everything is destroyed now.”
But now the home in an upper middle class neighborhood is in foreclosure, up for a sheriff’s sale in March, and it’s one of many on a growing list. Nationally, one in four homes sold is in foreclosure.
Chaplin worries the home may bring down her property value if she one day tries to sell.
“I hope not,” Chaplin said. “I’m not selling that house yet, but I wonder if I would want to sell that house, I’ll probably have a problem.”
A few years ago, banks preferred foreclosing on homes. But now, real estate lawyers say they are switching to short sales, where they work with the homeowner to sell the house.
“It shows on the credit report that you worked with the lender to mitigate the lender’s losses and you tried to work with them rather than just abandoned them and walked away,” says real estate lawyer Dan Kelley.
Kelley says he does 50 short sales a year now, compared to only one or two short sales five years ago. According to RealtyTrac, short sales jumped 15% in the last quarter of 2011. And the average short sale sold for $185,000, while the average foreclosure sale sole for $150,000.
As long as the housing market struggles to recover, experts predict a rise in short sales and a healthy number of foreclosures in an unhealthy economy.
For more information on foreclosures and short sales, click here.