It seems hard to imagine, but
CoreLogic said on Wednesday that once-upon-a time, before the housing crisis,
the sale of distressed homes made up only a miniscule 2 percent of the home
sale market. Still, much progress has
been made and the company said that sales of bank-owned real estate (REO) and
short sales made up 11.4 percent of all sales during the month.
Even with distressed sales running
at more than five times what might be considered "normal" the June figures
represent substantial improvement. When
those sales were at their peak, in January 2009, they made up nearly one-third
(32.5 percent) of the market with REO alone accounting for 28 percent. Nineteen straight months of year-over-year
declines in the sales have contributed to the rise in home prices as distressed
sales traditionally sell at a discount from the market price.
Distressed sales in June were at the
lowest level since December 2007 and were down from 15.8 percent in June
2013. REO sales in June comprised 7.2
percent of all home sales and short sales 4.2 percent.
Despite a dramatically improved
national picture the share of distressed sales remains far above pre-crisis
levels in some localities. Michigan had the largest share among the
states at 27 percent in June, followed by Illinois (24.1 percent), Florida
(23.6 percent), Nevada (22.7 percent) and Georgia (20.7 percent). Chicago-Naperville-Arlington Heights led
large metropolitan areas with a 27.4 percent share of distressed sales, followed
by three Florida areas, Miami-Miami Beach-Kendall (26.4 percent),
Orlando-Kissimmee-Sanford (24.8 percent), and Tampa-St. Petersburg-Clearwater
(24.6 percent). The Las
Vegas-Henderson-Paradise metro area was number five at 23.9 percent.
California experienced a
14.6-percentage point drop in the distressed sales share, the largest of any
state and the Sacramento-Roseville-Arden-Arcade region had the largest drop
among metropolitan areas with the distressed share of sales falling by 17.1
percentage points from 33.1 percent in June 2013 to 16.1 percent in June 2014.