October sees Seasonal Uptick in Distressed Home Sales Share

Sales of distressed properties made up 10.2 percent of total
home sales in October CoreLogic said on Tuesday.  The October number represented a slight seasonal
increase of 0.2 percent from September but was two full percentage points lower
than in October 2014.

Sales of lender owned real estate (REO) constituted 6.9
percent of sales compared to an 8.5 percent share a year earlier and was the
lowest for any October since 2007.  Short
sales
made up 3.3 percent of sales for the month.  Short sales have maintained a share within
the 3 to 4 percent range since mid-2014.

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Distressed sales hit a peak share of 32.4 percent in January
2009
with REO alone having a 27.9 percent share.  The declining market share of REOs and short
sales has contributed to the increase in home prices as distressed properties
are generally sold at a discount. 

The distressed sales share was lower than it was in October
2014 in all but nine states.  Maryland
had the largest share of distressed sales of any state at 20.3 percent in
October 2015, followed by Michigan (19.6 percent), Florida (19.3 percent),
Connecticut (19.1 percent) and Illinois (17.9 percent).

Among large Core Based Statistical Areas (CBSAs) Orlando had the largest
share of distressed sales at 21.8 percent, followed by Tampa-St.
Petersburg-Clearwater at 21.1 percent, Baltimore (20.7 percent), Miami (20.6
percent), and Chicago 20.5 percent).

CoreLogic points out 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.  At
present only North Dakota and the District of Columbia are within one
percentage point of their normal level of distressed sales.   If the current year-over-year decrease in
the distressed sales share continues there will be a national return to that “normal”
2-percent mark in mid-2019.

Article source: http://www.mortgagenewsdaily.com/12292015_corelogic_distressed_sales.asp

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