CoreLogic has cut back the timeline under which it expects to see distressed properties return to the share of sales that prevailed prior to the housing crisis. Its report on distressed sales for April now anticipates that, at the current rate of decline those sales will be back to about 2 percent of all home sales by mid-2017. In previous reports it had predicted that level would be achieved by mid-2018.
Distressed properties accounted for 8.8 percent of home sales in April, down 3 percentage points from April 2015 and 1.7 percentage points from March. REO sales made up 5.7 percent of home sales during the month with short sales making up the balance.
Sales of REO were down 2.4 points from a year earlier to the lowest share for any April since 2007. The short sales share fell below 4 percent in mid-2014 and has remained in the 3-4 percent range since then.
The April share was off the peak of REO sales by 22.2 points. Distressed sales had a 32.4 percent share of the home sale market at the peak in January 2009 with sales of REO accounting for 27.9 percent of total sales. Distressed properties are usually sold at a discount so tend to put downward pressure on home prices.
CoreLogic said distressed sales shares fell in all but seven states. The highest share was in Maryland at 19.5 percent followed by Connecticut (18.6 percent), Michigan (18.1 percent), Florida (16.4 percent) and Illinois (16.3 percent).
Florida had a 5.3 percentage point drop in its distressed sales share from a year earlier, the largest decline of any state while California has declined furthest from its peak, falling 60.1 percentage points from January 2009's 67.5 percent share. Oil states continued to see year-over-year declines in their distressed sales shares with Texas down 1.3 percentage points and Oklahoma and North Dakota both dipping by 0.2 percentage point. North Dakota in fact had the smallest distressed sales share in the nation at 2.4 percent.
Of the 25 largest Core Based Statistical Areas (CBSAs) based on mortgage loan count, the Baltimore area had the largest share of distressed sales at 19.5 percent, followed by Chicago (18.5 percent), Tampa-St. Petersburg-Clearwater. (17.9 percent), Orlando (17.5 percent) and Newark (15.7 percent). Three of the largest 25 CBSAs had year-over-year increases in their distressed sales share: Nassau-Suffolk Counties in New York was up 1 point; Cambridge-Newton-Framingham, Massachusetts rose 0.8 percentage points and Newark gained 0.7 point.