Within the category, REO sales made up 6.1% of all U.S. home sales in July, while short sales made up 3.3%. The REO share was at its lowest level since 2007.
The move away from REO sales is driving improved home prices, since bank-owned properties usually sell at a larger discount than short sales, according to CoreLogic. However, distressed sales as a whole are still quite a bit higher than they were prior to the housing meltdown. The pre-crisis level of distressed sales was normally around 2%. If the current trend continues, distressed sales would reach that “normal” mark in mid-2019.
Florida had the largest share of distressed sales in July at 20.7%, followed by Maryland (20.6%), Michigan (20.2%), Connecticut (19.1%) and Illinois (18.9%).
Nevada saw the largest year-over-year drop in distressed sales, plummeting 6.4 percentage points. California had the largest improvement from its peak distressed sale share. In January of 2009, California’s distressed sale share was 67.4%; since then, it’s fallen 58.6 percentage points.
U.S. distressed sales – which include real estate-owned properties and short sales – fell to just 9.4% of total home sales in July, according to new data from CoreLogic. That’s down 2.1 percentage points from July of 2014 and o.4 percentage points from last month.