Distressed Home Sales Drop To 7 Year Low

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Peoples Home Equity shares news of how the housing market has greatly improved thanks to a decline in distressed home sales.

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Real estate is very regional, there are markets within markets, in any city one just needs to search through many listings to find the best deals what is appropriate for them.

Lenders like Peoples Home Equity were pleased to read a recent February 24th report from Corelogic highlighting the fact that “Distressed Sales Accounted for Almost 13 Percent of Total Home Sales in December 2014.”

Corelogic, a leading provider of property information and real estate analytics, stated in its report that “Distressed sales (REO and short sales) accounted for 12.8 percent of total home sales nationally in December 2014, a 2.8 percentage point drop from December 2013, and a 1.2 percentage point drop from November 2014.”

The number of REO sales was more than double the number of short sales in December. REO sales made up 8.8% and short accounted for 4%.

As a reminder, “At its peak, the distressed sales share totaled 32.4 percent of all sales in January 2009, with REO sales making up 28 percent 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.”

Peoples Home Equity knows this news is great for existing home owners since it allows median home sale prices to climb fast, but the news is also great for first-time home buyers. The fact that distressed sales are low means that buyers can be confident they are purchasing a property in a growing market. Peoples Home Equity also reminds buyers that are discouraged by the news thinking there aren’t any more housing bargains available on the market to remember that real estate prices are still below peak levels, especially in cities like Phoenix, Las Vegas, Miami, and Chicago. Real estate is very regional, there are markets within markets, in any city one just needs to search through many listings to find the best deals what is appropriate for them.

Corelogic highlighted regions where higher and lower distressed sales occurred by stating, “Michigan had the largest share of distressed sales of any state at 23.6 percent in December 2014, followed by Florida (22.4 percent), Illinois (20.8 percent), Maryland (18.7 percent) and Connecticut (18.6 percent). Nevada experienced a 9.6 percentage point drop in the distressed sales share from a year earlier, the largest of any state. California experienced the largest improvement from the peak distressed sales share of any state, falling 56.9 percent from its January 2009 peak of 67.4 percent.”

Looking at metropolitan areas “based on population, Miami-Miami Beach-Kendall, Fla. had the largest share of distressed sales at 24.7 percent, followed by Orlando-Kissimmee-Sanford, Fla. (24.2 percent), Tampa-St. Petersburg-Clearwater, Fla. (24 percent), Chicago-Naperville-Arlington Heights, Ill.(23.6 percent) and Las Vegas-Henderson-Paradise, Nev. (19.8 percent). 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 percent in December 2013 to 13.8 percent in December 2014.”

As the housing market continues to improve Peoples Home Equity thinks buyers should not wait too long to purchase a home. Lenders are expecting interest rates to rise during the summer under the order of the Federal Reserve.

If in need of a mortgage, contact a Peoples Home Equity loan officer today at: 262-563-4026

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Giorgio U Ferrero
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