U.S. bank-owned sales hit 8-year low

by Ryan Smith11 Sep 2015
Real-estate-owned housing sales hit their lowest level since 2007 in June, while distressed sales as a whole also saw a drop, according to new data from CoreLogic.

Distressed sales accounted for 9.4% of total U.S. home sales in June, down 0.9 percentage points from the prior month and 2.4 percentage points from June of 2014. The total distressed sale rate was the lowest for June since 2007, when it was 4.9%.

Meanwhile, REO sales made up 6% of total home sales, the lowest rate since September of 2007, when it was 5.2%. That move away from REO sales is helping to improve home prices, according to CoreLogic; bank-owned homes generally sell at a steeper discount than short sales.

Florida saw the largest share of distressed sales in the nation at 21%, followed by Michigan (20.7%), Maryland (20.5%), Connecticut (19.3%) and Illinois (19.1%).

California showed the largest improvement from its peak distressed sales share of 67.4% in January of 2009, falling 58.3 percentage points to finish June with a share of 9.1%. Nevada saw the biggest year-over-year drop with a 6.8 percentage point decline in distressed sales from June of 2014.

The normal pre-crisis distressed-sale rate in the U.S. was about 2%, according to CoreLogic. If the current annual decrease trend continues, distressed sales would reach that mark in mid-2018.

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