ATTOM: Distressed Sale Share at 9-Year Low

ATTOM Data Solutions, Irvine, Calif., said the share of distressed single-family home and condo sales fell in 2016 to the lowest level in nine years.

The company’s 2016 U.S. Home Sales Report said distressed sales represented 16.2 percent of home sales, down from 18.8 percent in 2015 and the lowest level since 2007. Distressed sales included bank-owned sales, short sales and foreclosure auctions sold to third-party buyers.

The report also noted home sellers saw their biggest average profits since 2007 last year and 44 percent of metro housing markets saw record home price peaks. However, the report also said the share of foreclosure auctions to third-party buyers also reached a record high.

Among 193 metropolitan statistical areas with a population of 200,000 or more and at least 100 distressed sales in 2016, those with the highest share of total distressed sales were Atlantic City, N.J. (43.8 percent); Hagerstown-Martinsburg, Md.-W.Va. (33.2 percent); Rockford, Ill. (29.2 percent); Montgomery, Ala. (29.2 percent); and Baltimore (28.0 percent).

“The housing market hit several important milestones in 2016, with distressed sales at a nine-year low and home prices at a 10-year high, just barely below the pre-recession peak in 2006,” said Daren Blomquist, senior vice president with ATTOM Data Solutions. “Even distressed property sellers are benefitting from this hot seller’s market, with a record-high share of homes at foreclosure auction being purchased by third-party buyers rather than reverting back to the foreclosing bank.”

The report said bank-owned sales accounted for 8.0 percent of all sales in 2016, down from 10.0 percent in 2015 to the lowest level since 2006. Short sales accounted for 5.5 percent, down from 6.0 percent in 2015 to the lowest level since 2008. Foreclosure auction sales (trustee’s sales or sheriff’s sales) selling to third-party investors (not including those going back to the foreclosing lender) accounted for 2.8 percent, down from 2.9 percent in 2015 to the lowest level since 2007.

Third-party buyers at the foreclosure auction accounted for 28.5 percent of all completed auctions in 2016 (with the remaining 71.5 percent going back to the foreclosing lender), up from 23.5 percent in 2015 to the highest level going back to 2000. ATTOM reported 96,438 single family homes and condos were sold to third-party buyers at foreclosure auctions in 2016.

Among 135 metropolitan statistical areas with at least 200,000 people and at least 100 foreclosure auction sales to third-party investors in 2016, those with the highest share going to third-party buyers were San Jose, Calif. (59.1 percent); Los Angeles (52.2 percent); Reno, Nev. (52.1 percent); Oxnard-Thousand-Oaks-Ventura, Calif. (50.3 percent); and Stockton, Calif. (50.2 percent).

Metro areas with the highest total number of foreclosure auction sales to third-party investors in 2016 were Miami (4,954); Philadelphia (4,043); Atlanta (3,657); New York-Newark-Jersey City (3,495); and Tampa (3,163).

“The increased competition at the foreclosure auction is resulting in higher sales prices there, which can even result in surplus proceeds going to the distressed homeowner in some cases after other lien holders have been paid,” Blomquist said. “

Homeowners who sold in 2016 realized an average home price gain since purchase of $38,206, which translated into an average 21 percent gain since purchase, up from an average 13 percent gain in 2015 to the highest since 2007.

Among 201 metropolitan statistical areas with a population of at least 200,000 and sufficient home price data, those with the highest average percent gain since purchase for home sellers in 2016 were San Francisco (69 percent); San Jose (69 percent); Santa Rosa, Calif. (52 percent); Los Angeles (49 percent); and Seattle (48 percent).

ATTOM reported nationwide the median home sales price in 2016 was $218,175, up 6.8 percent from 2015, but still slightly below (0.4 percent) the pre-recession peak of $219,000 in 2006. The 2016 median home price nationwide was up 45 percent from the post-recession low of $150,511 in 2011. Among 201 metropolitan statistical areas with a population of at least 200,000, 179 (89 percent) posted a year-over-year increase in home prices in 2016 and 27 metro areas (13 percent) posted double-digit year-over-year percentage gains, including Tampa-St. Petersburg (up 14.0 percent); Denver (up 11.3 percent); Portland (up 12.1 percent); Orlando (up 10.1 percent); and Jacksonville, Fla. (up 12.9 percent).

Among 299 counties with a population of at least 200,000 and sufficient sales data, those with the highest median home prices in 2016 were New York County (Manhattan) ($1,400,000); San Francisco County ($1,175,000); San Mateo County, Calif. ($1,075,000); Marin County, Calif. ($950,000); and Santa Clara County, Calif. ($860,000).

Among 201 metropolitan statistical areas with a population of at least 200,000, 89 metro areas (44 percent) reached record price peaks in 2016, including Dallas-Fort Worth ($230,571); Houston ($214,795); Atlanta ($181,000); Boston ($390,000); and San Francisco ($720,000).