Distressed Sales Down 2/3 from Peak

It seems hard to imagine, butrnCoreLogic said on Wednesday that once-upon-a time, before the housing crisis,rnthe sale of distressed homes made up only a miniscule 2 percent of the homernsale market.  Still, much progress hasrnbeen made and the company said that sales of bank-owned real estate (REO) andrnshort sales made up 11.4 percent of all sales during the month.</p

Even with distressed sales runningrnat more than five times what might be considered “normal” the June figuresrnrepresent substantial improvement.  Whenrnthose sales were at their peak, in January 2009, they made up nearly one-thirdrn(32.5 percent) of the market with REO alone accounting for 28 percent.  Nineteen straight months of year-over-yearrndeclines in the sales have contributed to the rise in home prices as distressedrnsales traditionally sell at a discount from the market price.</p

Distressed sales in June were at thernlowest level since December 2007 and were down from 15.8 percent in Junern2013.  REO sales in June comprised 7.2rnpercent of all home sales and short sales 4.2 percent.  </p

Despite a dramatically improvedrnnational picture the share of distressed sales remains far above pre-crisisrnlevels in some localities.   Michigan had the largest share among thernstates at 27 percent in June, followed by Illinois (24.1 percent), Floridarn(23.6 percent), Nevada (22.7 percent) and Georgia (20.7 percent).   Chicago-Naperville-Arlington Heights ledrnlarge metropolitan areas with a 27.4 percent share of distressed sales, followedrnby three Florida areas, Miami-Miami Beach-Kendall (26.4 percent),rnOrlando-Kissimmee-Sanford (24.8 percent), and Tampa-St. Petersburg-Clearwaterrn(24.6 percent).  The LasrnVegas-Henderson-Paradise metro area was number five at 23.9 percent. </p

California experienced arn14.6-percentage point drop in the distressed sales share, the largest of anyrnstate and the Sacramento-Roseville-Arden-Arcade region had the largest droprnamong metropolitan areas with the distressed share of sales falling by 17.1rnpercentage points from 33.1 percent in June 2013 to 16.1 percent in June 2014.

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