Distressed sales – including real estate owned (REO) properties and short sales – accounted for 9.9% of total home sales nationally in May, a decrease of 1.7% compared to April and down 2.8% from May 2014, according to recent figures from CoreLogic.
It was the lowest share since 2007, when distressed sales averaged 5% of all sales.
REO sales accounted for 6.4% and short sales made up 3.5% of total home sales in May, according to a recent post on the CoreLogic blog. That's the lowest since October 2007 when it was 6%, CoreLogic's Molly Boesel writes.
The share of short sales, meanwhile, has remained stable since around mid-2014, at just below 4%.
At the peak in January 2009, distressed sales totaled 32.4% of all sales, with REO sales representing 27.9% of that share.
‘The ongoing shift away from REO sales is a driver of improving home prices since bank-owned properties typically sell at a larger discount than short sales,’ Boesel writes. ‘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 two percent. If the current year-over-year decrease in the distressed sales share continues, it would reach that 'normal' two-percent mark in mid-2018.’
States with the largest shares of distressed sales in May included Michigan (21.4%), Florida (21.3%), Maryland (20.3%), Illinois (19.4%) and Connecticut (19.3%).
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