RealtyTrac: Distressed Sales Fell To New Lows In Q3

Posted by Patrick Barnard on October 28, 2014 No Comments
Categories : Residential Mortgage

Distressed sales are no longer propping up the housing market to the degree that they were a year ago, a report from RealtyTrac shows.

Single-family homes, condominiums and townhouses sold at an estimated annual pace of 4,402,741 in September, a decrease of 1% from August and a decrease of 19% compared to September 2013, according to the firm's Residential & Foreclosure Sales Report.

Distressed sales, including bank-owned sales and short sales, accounted for 12.7% of all sales in the third quarter, down from 14.2% in the second quarter and down from 14.5% in the third quarter of 2013. This is an important metric, as a majority of distressed sales have been to investors during the past two years. With investors slowly withdrawing from the market, as real estate owned (REO) inventory dries up, home prices are expected to decline.

Metro areas with the highest share of distressed sales in the third quarter included Las Vegas (34.9%); Stockton, Calif. (31.8%); Modesto, Calif. (31.2%); Lakeland, Fla. (26.1%); and Jacksonville, Fla. (26.1%).

Short sales accounted for 3.8% of all sales in the third quarter, down from 4.2% in the second quarter and down from 4.7% in the third quarter of 2013 to reach the lowest level since the first quarter of 2011.

Metros with the highest percentage of short sales in the third quarter included Las Vegas (10.5%); Lakeland, Fla. (10.4%); Cape Coral, Fla. (10.4%); Orlando, Fla. (10%); Tampa, Fla. (9.7%); Miami (9.2%); Palm Bay, Fla. (9%); Jacksonville, Fla. (8.4%); and Sarasota, Calif. (8.2%).

Sales of bank-owned properties accounted for 7.8% of all sales in the third quarter, down from 8.8% in the previous quarter and down from 9.0% in the third quarter of 2013 to reach the lowest level since the first quarter of 2011.

Metro areas with the highest percentage of bank-owned sales in the third quarter were Stockton, Calif. (26.1%); Modesto, Calif. (25.2%); Las Vegas (23.2%); Riverside-San Bernardino, Calif. (19.7%); Bakersfield, Calif. (18.5%); Phoenix (18.5%); and Sacramento, Calif. (16.2%).

Sales at public foreclosure auctions accounted for 1.1% of all sales nationwide in the third quarter, down from 1.2% in the previous quarter but up from 0.9% in the third quarter of 2013.

Metro areas with the highest percentage of auction sales included Lakeland, Fla., (4.9%); Miami (3.9%); Orlando, Fla. (3.7%); Palm Bay-Melbourne-Titusville, Fla. (3.5%); and Tampa, Fla. (3.4%).

The average sales price for a residential property – including both distressed and non-distressed sales – in September was $195,000, an increase of less than 1% compared to August, but up 15% compared to September 2013.

September was the 30th consecutive month where the U.S. median home price increased on an annual basis, and the 15% annual increase is the biggest annual percentage increase since October 2005, RealtyTrac reports.

In a release, Daren Blomquist, vice president of RealtyTrac, points out that because distressed sales have declined, that means fewer homes are selling on the lower end of the price spectrum.

‘Median home prices nationally in September were boosted by a new low in the share of distressed sales during the third quarter, resulting in fewer home sales on the lower end,’ Blomquist says. ‘The share of homes selling above $200,000 is up 7 percent from a year ago, and the share of homes selling above $500,000 is up 15 percent from a year ago.’

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