Markets & Economy

Distressed sales on pace to return to normal level soon enough

CoreLogic: The rate of short sales and bank-owned home sales was at 2008 levels in February

The rate of distressed home sales fell to 2008 levels in February and should return to a historically normal level in mid-2017 if the annual decrease seen that month holds steady, according to data aggregator CoreLogic.

Distressed home sales — bank-owned home sales and short sales — accounted for 13.5 percent of total sales in February, down 3 percentage points from a year ago.

corelogic

The shift away from bank-owned home sales is helping fuel home price growth, as bank-owned properties typically sell at a larger discount than homes sold in a short sale, according to CoreLogic.

Distressed sales’ share of total sales in February also fell on a monthly basis, dropping by 0.8 percentage points from January’s level. The rate of distressed sales typically decreases month over month in February due to seasonal factors.

Bank-owned home sales accounted for 9.7 percent of total home sales in February and short sales made up 3.8 percent.

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Distressed sales’ share of total sales peaked in January 2009 at 32.4 percent, with REO (real estate owned) sales representing 27.9 percent of that share, CoreLogic said.

Email Teke Wiggin.