Distressed-home sales still thinning: CoreLogic
IRINVE, Calif. (7/13/15)--Distressed-home sales continue to make up less and less of the housing market, as in April only 11.1% of all home sales were distressed, a 1.5% drop from March and a 3% drop on an annual basis, according to Irvine, Calif.-based CoreLogic (Housingwire.com July 9).
Distressed sales are either real estate-owned (REO) or short sales.
While April usually brings declines in distressed-home sales because of seasonal factors, this year’s distressed-home sale share was the lowest for the month of April since 2007.
“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,” according to the CoreLogic report. “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 distressed sales share continues, the distressed sales share would reach that ‘normal’ 2% mark in mid-2017.”
At its peak in January 2009, distressed sales accounted for 32.4% of all sales, with REO sales representing 27.9% of that share. In April, REO sales made up 7.4% of all distressed sales, while short sales comprised 3.7%, according to the data.
The short-sales percentage dropped below 4% in mid-2014 and has remained flat since.