Mary­land, Florida top states for Au­gust dis­tressed home sales

Financial Mirror (Cyprus) - - FRONT PAGE -

U.S. sales of dis­tressed homes to­taled 9.3% of all homes sold in Au­gust of this year, ac­cord­ing to CoreLogic data. That is a 2.3 per­cent­age point drop com­pared with Au­gust of 2014 and down 0.4 per­cent­age points com­pared with July of this year.

A dis­tressed sale is a trans­ac­tion in­volv­ing a real es­ta­te­owned (REO) property or a short sale. In Au­gust, REO sales ac­counted for 6% of all home sales, and short sales ac­counted for 3.3% of all sales in the month. At the peak of dis­tressed sales in Jan­uary 2009, 32.4% of all sales were dis­tressed, in­clud­ing REO sales, to­tal­ing 27.9% of all sales.

The CoreLogic re­port noted that “while dis­tressed sales play an im­por­tant role in clear­ing the hous­ing mar­ket of fore­closed prop­er­ties, they sell at a dis­count to non-dis­tressed sales, and when the share of dis­tressed sales is high, they can pull down the prices of non-dis­tressed sales. There will al­ways be some level of dis­tress in the hous­ing mar­ket, and by com­par­i­son, the pre-cri­sis share of dis­tressed sales was tra­di­tion­ally about 2%. If the cur­rent year-on-year de­crease in the dis­tressed sales share con­tin­ues, it would reach that ‘nor­mal’ 2% mark in mid-2018.”

The five states with the largest per­cent­age of dis­tressed sales were Mary­land (20.8%), Florida (20.3%), Michi­gan (19.9%), Con­necti­cut (19.1%) and Illi­nois (18.7%). North Dakota posted the small­est share of dis­tressed home sales at just 2.7%. Ne­vada had a six-point drop in its dis­tressed sales share from a year ear­lier, the largest de­cline of any state, and Cal­i­for­nia had the largest im­prove­ment of any state from its peak dis­tressed sales share, fall­ing 58.7 per­cent­age points from its Jan­uary 2009 peak of 67.4%.

Among the 25 largest met­ro­pol­i­tan ar­eas, th­ese five posted the largest per­cent­age of dis­tressed sales: Or­lando-Kis­sim­mee-San­ford, Fla. (23.4%); Tampa-St. Peters­burg-Clear­wa­ter, Fla. (21.9%); Miami-Miami Beach-Ken­dall, Fla. (21.9%); Bal­ti­more-Columbia-Tow­son, Md. (21.2%); Chicago-Naperville-Ar­ling­ton Heights, Ill. (21.1%). Las Vegas-Hen­der­son-Par­adise, Ne­vada, had the largest year-on-year drop in its dis­tressed share, fall­ing by 5.9 points from 21.8% in Au­gust 2014 to 15.9% in Au­gust 2015. River­side-San Bernardino-On­tario, Cal­i­for­nia, had the largest over­all im­prove­ment in its dis­tressed sales share from its peak value, drop­ping from 76.3% in Fe­bru­ary 2009 to 11.4% in Au­gust 2015.

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