Home Sales Cool as Distressed Inventory Evaporates

Homernsales continue to cool, dipping to a seasonally adjusted annual rate of 5.08rnmillion in February RealtyTrac said today. rnThis was a -0.2 percent change from January and marked the fourthrnconsecutive month where sales have fallen on a month-over-month basis.  Sales in February 2014 still managed tornremain 7 percent higher than in the same period in 2013.</p

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Easingrnsales were noted nationwide.  Thirty-onernstates posted monthly decreases and six states saw sales drop from a yearrnearlier as did 21 of the 50 largest metro markets. </p

“Supplyrnand demand have reached a bit of a standoff in this uneven real estaternrecovery,” said Daren Blomquist, vice president at RealtyTrac. “The supply ofrndistressed properties – which buyers and investors have come to rely on overrnthe past few years – is evaporating quickly in most markets, but that dwindlingrnsupply is not being adequately replenished by non-distressed homeowners listingrntheir homes or by new homes being built. Meanwhile, a key source of demand overrnthe past two years – institutional investors purchasing single family homes asrnrentals – is starting to decline, and it’s not yet clear if that diminishingrndemand will be filled by first-time homebuyers and move-up buyers.” </p

Distressedrnproperties still account for significant portions of real estate salesrnaccording to the RealtyTrac figures.  Ofrnsales in February 5.7 percent were classified as short sales – sales of homesrnpre-foreclosure with the bank taking less in payment than the value of the loanrn- and sales of bank owned homes (REO) for another 11.2 percent.  The combined share of distressed sales – 16.9rnpercent – was an increase from 16.1 percent in January but down from 19.1rnpercent in February 2013. </p

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Thernnational median sales price of U.S. residential properties, including bothrndistressed and non-distressed sales, was $164,667 in February, down 1 percentrnfrom the previous month but up 4 percent from February 2013. February markedrnthe 20^th consecutive month where the U.S. median price increased orrnstayed flat annually, but it was the second consecutive month with a monthlyrndecrease. The median price of distressed properties was $96,606 in February, 44rnpercent below the median price of non-distressed properties: $172,339.</p

Salesrnat the public foreclosure auction accounted for1.5 percent of national sales,rnup from 1.3 percent in January and 1.1 percent in February 2013.   RealtyTrac said that 97 percent of at-auctionrnsales were all cash and 35 percent of the properties were sold to institutionalrninvestors, i.e. entities that had purchased 10 or more properties in a calendarrnyear.  Those institutional investorsrnaccounted for 5.9 percent of all residential sales in February, compared to 5.0rnpercent in January and 7.2 percent a year earlier.  February was the third consecutive month wherernthe institutional investor share of sales declined on a year-over-year basisrnafter 19 consecutive months of year-over-year increases.</p

All-cashrnsales continue in significant numbers as well; 43.3 percent of all U.S.rnresidential sales in February were cash compared to 42.1 percent in January andrn20.2 percent in February 2013. February was the eighth consecutive month whererncash sales accounted for 35 percent or more of all sales nationwide

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