CoreLogic: Distressed Just 10% of December Home Sales
CoreLogic, Irvine, Calif., said distressed sales accounted for just 10 percent of homes sold in the U.S. in December, with real estate owned sales at just 3.4 percent.
The company reported of total sales in December, distressed sales made up 10.3 percent and REO sales made up 6.9 percent. The REO sales share was 21 percentage points lower than it was at the peak recorded in January 2009 at 27.9 percent. The short sales share fell below 4 percent in mid-2014 and has remained in the 3-4 percent range since then. At its peak in January 2009, distressed sales totaled 32.4 percent of all sales, with REO sales representing 27.9 percent of that share.
CoreLogic reported only eight states saw increases in their distressed sales shares in December. Maryland had the largest share of distressed sales of any state at 20.2 percent in December, followed by Connecticut (19.2 percent), Florida (18.5 percent), Michigan (18.2 percent) and Illinois (17.6 percent). North Dakota had the smallest distressed sales share at 2.7 percent. Nevada had a 5.1 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 59.5 percentage points from its January 2009 peak of 67.4 percent. 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 levels (each within one percentage point).
Of the 25 largest Core Based Statistical Areas, Orlando had the largest share of distressed sales at 20.4 percent, followed by Baltimore (20.3 percent), Tampa-St. Petersburg (20.2 percent), Chicago (20.1 percent) and Las Vegas (14.5 percent). Denver had the smallest distressed sales share at 2.9 percent. Las Vegas had the largest year-over-year drop in its distressed sales share, falling by 5.3 percentage points to 14.5 percent. Riverside-San Bernardino-Ontario, Calif. had the largest overall improvement in its distressed sales share from its peak value, dropping from 76.3 percent in February 2009 to 10.7 percent in December 2015.
“While distressed sales play an important role in clearing the housing market of foreclosed properties, they sell at a discount to non-distressed sales, and when the share of distressed sales is high, it can pull down the prices of non-distressed sales,” the report said. “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 percent. If the current year-over-year decrease in the distressed sales share continues, it will reach that “normal” 2 percent mark in mid-2018.”
