Distressed Sale Dive Reflects Positive Transition in California

Relatively speaking, one might say that the distressed housing market inrnCalifornia has virtually evaporated.  ThernCalifornia Association of Realtors® (C.A.R.) said today that more thanrntwo-thirds of home sales in the state five years ago were short sales and bankrnowned real estate (REO).  Thosernproperties now make up only 15.6 percent of the market.  Thernstatewide share of equity sales hit a high of 86.4 percent in November 2013 andrnhas been above 80 percent for the past seven months. C.A.R. did not providernfigures on what would constitute a distressed/equity split in a “normal” market.rn  </p

InrnJanuary 2009, 60 percent of home sales were REO properties while short salesrnmade up another 9.1 percent.  Short salesrnpeaked in January 2012 at 25.6 percent but now account for only 9.2 percent ofrnthe market while REO sales comprise 6.4 percent.    Duringrnthe same time period, California’s median home price has soared more than 64rnpercent from $249,960 in January 2009 to $410,990 in January 2014.</p

In some California countiesrndistressed property sales were almost the only market in 2009.  In Sacramento County, for example, short andrnREO sales had an 85.6 percent share.  Tworncounties in the Central Valley, Stanislaus and San Joaquin were over 90rnpercent.  Sacramento now has a distressedrnmarket of 19.9 percent and those sales make up about a quarter of transactions inrnthe two other counties.  The highestrnshare in January was in Fresno County at 26.3 percent.  Of the reporting counties, San Luis Obispo,rnOrange, Santa Clara, and San Mateo counties held the lowest share of distressedrnsales in January 2014 at 10.2 percent, 9.5 percent, 7.7 percent, and 6.8rnpercent, respectively.  </p

“The dramatic drop in the share of distressed salesrnthroughout the state reflects a market that is fully transitioning from thernhousing downturn,” said C.A.R. President Kevin Brown.   “Significant home price appreciation over thernpast five years has lifted the market value of many underwater homes, and as arnresult, many homeowners have gained significant equity in their homes,rnresulting in fewer short sales and foreclosures.”

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