Distressed Sales Down To Just Nine Percent Of Homes Sold

Dated: October 9 2015

Views: 645

REO bank owned

Distressed sales, which include real estate-owned properties and short sales, accounted for 9.4% of total home sales nationally in July 2015, down 2.1 percentage points from July 2014 and down 0.4 percentage pointsfrom June 2015, CoreLogic reports.


Within the distressed category, REO sales accounted for 6.1% and short sales made up 3.3% of total home sales in July 2015. The REO sales share was the lowest since September 2007 when it was 5.2%.


The short sales share fell below 4% in mid-2014 and has remained in the 3-4% range since then. At its peak in January 2009, distressed sales totaled 32.4% of all sales, with REO sales representing 27.9% of that share.


Click to enlarge

(Source:


The ongoing shift away from REO sales is a driver of improving home prices since bank-owned properties typically sell at a larger discount than short sales. There will always be some level of distress in the housing market, and by comparison, the pre-crisis share of distressed sales was traditionally about 2%. If the current year-over-year decrease in the distressed sales share continues, it would reach that "normal" 2% mark in mid-2019.


Florida had the largest share of distressed sales of any state at 20.7% in July 2015, followed by Maryland (20.6%), Michigan (20.2%), Connecticut (19.1%) and Illinois (18.9%). Nevada had a 6.4 percentage point drop in its distressed sales share from a year earlier, the largest decline of any state.


California had the largest improvement of any state from its peak distressed sales share, falling 58.6 percentage points from its January 2009 peak of 67.4%. While some states stand out as having high distressed sales shares, only North Dakota and the District of Columbia are close to their pre-crisis numbers (within one percentage point).


Of the 25 largest CBSAs based on loan count, Orlando-Kissimmee-Sanford, Fla. had the largest share of distressed sales at 23.8%, followed by Miami-Miami Beach-Kendall, Fla. (22.3%), Tampa-St. Petersburg-Clearwater, Fla. (22.3%), Chicago-Naperville-Arlington Heights, Ill. (21.7%) and Baltimore-Columbia-Towson, Md. (21%).


Warren-Troy-Farmington Hills, Mich. had the largest year-over-year drop in its distressed sales share, falling by 6.6 percentage points from 19.8% in July 2014 to 13.2% in July 2015. Riverside-San Bernardino-Ontario, Calif. had the largest overall improvement in its distressed sales share from its peak value, dropping from 76.3% in February 2009 to 11.7% in July 2015.


Source

Blog author image

Mark Ross

For Mark Ross, founder of Ross NW Real Estate and professional real estate broker, real estate has always been the career of choice. During his 30 years in the industry, Mark has gained experience in ....

Latest Blog Posts

What Happens After Foreclosure Moratorium Ends

Since early 2020, banks across the U.S. have been banned from foreclosing on homes as part of the federal government’s efforts to assist families feeling economic pain caused by the pandemic. On

Read More

4 To Dos For July To Save Money Get Ready For Fall

When it's hot outside, smart homeowners focus their energies inside on these four tasks.You know: Like taking advantage of your nice, cool basement.#1 Organize the BasementThe two most common types

Read More

5 Red Flags To Spot In A Home Inspection Report

There is a certain leap of faith that all buyers take when they make an offer on a new home. If the market is especially competitive, it’s not uncommon for prospective buyers to see a property

Read More

New Aid Coming For Mortgage Borrowers At Risk Of Foreclosure

Borrowers who fell behind on their mortgages during the Covid-19 pandemic and continue to face economic hardship will get help from a Biden administration program announced on Friday, a bid to

Read More