A scarcity of nondistressed inventory in many markets in January helped bank-owned properties, short sales and foreclosure auctions account for nearly 1 in 5 existing-home sales in January, a new report from data aggregator RealtyTrac suggests.
Short sales and distressed homes accounted for 17.6 percent of existing-home sales — the highest proportion since March 2013 — according to RealtyTrac’s January Residential and Foreclosure Sales Report.
Real estate owned, or “REO,” homes accounted for 10.2 percent of sales, short sales captured 5.9 percent market share, and foreclosure auctions took a 1.5 percent slice of the sales pie.
Another sign of the lingering effects of the housing boom and bust: All-cash deals accounted for 44 percent of sales in January, the seventh consecutive month that sales to buyers without mortgages have been greater than 35 percent.
Institutional investors (entities purchasing at least 10 properties in a calendar year) accounted for 5.2 percent of residential sales, down from 8.2 percent a year ago to the lowest monthly level since March 2012.
While institutional investors seemed to be losing their appetite for markets in Florida and Arizona that were hit hard early in the downturn, investors appear to be shifting their focus to markets where there are still deals to be had.
The share of sales to institutional investors was up in 23 out of 101 metros analyzed by RealtyTrac, including Atlanta (up 9 percent), Austin, Texas, (up 162 percent), Denver (up 21 percent), Cincinnati (up 83 percent), Dallas (up 30 percent), and Raleigh, N.C. (up 15 percent).
“Many have anticipated that the large institutional investors backed by private equity would start winding down their purchases of homes to rent, and the January sales numbers provide early evidence this is happening,” said RealtyTrac’s Daren Blomquist in a statement.