Distressed sales – short sales and sales of real estated-owned properties – made up 11.1% of total home sales in April, according to the report. That’s down 1.5 percentage points from March and three percentage points from April of 2014. It’s also the lowest April share since 2007.
Short sales made up 3.7% of total home sales in April, while REO sales accounted for 7.4%, according to CoreLogic.
The continued drop in distressed sales is a good thing. At the peak in January of 2009, distressed sales accounted for 32.4% of all U.S. home sales, with REO sales making up 27.9% of that. However, distressed sales are still accounting for an abnormally large percentage of total U.S. home sales.
“The ongoing shift away from REO sales is a driver of improving home prices since bank-owned properties typically sell at a larger discount than short sales,” the CoreLogic report noted. “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-over-year decrease in distressed sales continues unabated, the distressed sales share of U.S. home sales should reach the traditional 2% mark around mid-2017, according to CoreLogic.
Distressed sales of U.S. homes are dropping, according to a new report form analytics firm CoreLogic.