Distressed sales (REO and short sales) accounted for 12.8% of total home sales nationally in December, a drop of 1.2 percentage points compared to November and a drop of 2.8 percentage points compared to December 2013, according to a recent post on CoreLogic's Insights blog.
Within the distressed category, REO sales made up 8.8% of total home sales in December, while short sales made up 4%.
Around the peak of the housing crisis, in January 2009, the distressed sales share totaled 32.4% of all sales, with REO sales making up 28% of that share.
‘The ongoing shift away from REO sales is a driver of improving home prices, as REOs typically sell at a larger discount than do short sales,’ explains Molly Boesel, senior economist at CoreLogic, in the post. ‘There will always be some amount of distress in the housing market, so one would never expect a 0 percent distressed sales share, and by comparison, the pre-crisis share of distressed sales was traditionally about 2 percent.’
States with the largest share of distressed sales, as part of overall sales, in December included Michigan (23.6%), Florida (22.4%), Illinois (20.8%), Maryland (18.7%) and Connecticut (18.6%).
Nevada experienced a 9.6 percentage point drop in the distressed sales share from a year earlier, the largest drop of any state, according to the report.
Metropolitan areas with the largest share of distressed sales in December included Miami-Miami Beach-Kendall, Fla. (24.7%); Orlando-Kissimmee-Sanford, Fla. (24.2%); Tampa-St. Petersburg-Clearwater, Fla. (24%); Chicago-Naperville-Arlington Heights, Ill.(23.6%) and Las Vegas-Henderson-Paradise, Nev. (19.8%).
Riverside-San Bernardino-Ontario, Calif. had the largest year-over-year drop in its distressed share, falling by 10.8 percentage points from 24.6% in December 2013 to 13.8% in December 2014, according to the post.