Note: A couple of years ago I started watching several distressed markets very closely for a shift in the mix. We are now seeing a shift, although it is still early in the process …
I’ve been following the Sacramento market to look for changes in the mix of house
in a distressed area over time (conventional, REOs, and short sales). The Sacramento Association of REALTORS® started breaking out REOs in May 2008, and short sales in June 2009.
So far there has been a shift from REO to short sales, and the percentage of distressed sales has been declining year-over-year. This data would suggest some improvement although there are still more distressed sales to come.
In June 2012, 54.2% of all resales (single family homes and condos) were distressed sales. This was down from 58.3% last month, and down from 65.2% in June 2011. This is lowest level since the Sacramento Realtors started tracking distressed sales, but 54% distressed is still extremely high!
Here are the statistics.
Click on graph for larger image.
This graph shows the per cent of REO sales, short sales and conventional sales. There is a seasonal pattern for conventional sales (stronger in the spring and summer), and distressed sales happen all year – so the percentage of distressed sales decreases every summer and the increases in the fall and winter.
There has been a sharp increase in conventional sales, and there were more short sales than REO sales in June for the third consecutive month.
Total sales were down 0.8% compared to June 2011, but conventional sales were up 30% year-over-year. Active Listing Inventory for single family homes declined 65.5% from last June, and total inventory, including “short sale contingent”, was off 39% year-over-year.
Cash buyers accounted for 33.4% of all sales (frequently investors), and median prices were up 3.2% from last June.
This appears to be a little more progress, although the market is still in distress – and the full impact of the settlement is still unknown.
We are seeing similar patterns in other distressed areas.