14 September 2015
Distressed home sales typically decrease around this time of year due to seasonal factors, but short sales and sales of real estate owned (REO) properties this June fell to their lowest June rates since 2007, CoreLogic reported this week.
Distressed sales accounted for 9.4 percent of total home sales nationally in June, a decrease of 2.4 percentage points from the same month last year and 0.9 percentage point from the previous month. That’s the lowest monthly share reported in the month of June since 2007, when the share was 4.9 percent, CoreLogic said.
The property data provider reported an ongoing shift away from REO sales in particular. REO sales accounted for 6 percent of total home sales in June, falling to their lowest share of all sales since September 2007, when they represented 5.2 percent of all sales.
The share of short sales was more stable, CoreLogic reported. After falling to below 4 percent in mid-2014, they have hovered around that figure ever since, and in June, the share was 3.4 percent.
To give some context into how the housing market collapse impacted sales of distressed properties, CoreLogic said that at their peak in January 2009, distressed sales totaled 32.3 percent of all sales, with REO sales representing 27.9 percent of that share.
Precrisis, the share of distressed sales was traditionally about 2 percent. If the current year-over-year decrease in the distressed sales share continues, we will hit that “normal” 2 percent mark in mid-2018, CoreLogic predicted.
States struggling with the largest share of distressed sales are:
Florida (21 percent of all sales)
Michigan (20.7 percent)
Maryland (20.5 percent)
Connecticut (19.3 percent)
Illinois (19.1 percent)
California saw the largest improvement of any state, falling 58.3 percentage points from its January 2009 peak of 67.4 percent. Nevada also saw a 6.8 percentage point drop compared to the same period of last year.
Only North Dakota and Washington, D.C., are even close to their precrisis numbers, with each reporting distressed sales shares within 1 percentage point, CoreLogic said.
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