Distressed properties still large portion of Florida sales
By Matthew Sauer , Herald-Tribune / Thursday, July 9, 2015
Bank-Owned-REO-SignYears after the beginning of the housing recovery, Florida continues to hold a top spot in its share of distressed properties, according to an analysis released Thursday by real estate data provider CoreLogic.
Of sales that occurred in April, 21.7 percent of the Sunshine State’s transactions were either so-called real estate-owned or REOs or short sales. That put the Sunshine State only slightly behind Michigan, also at 21.7 percent, and ahead of Maryland, at 19.9 percent during April. Other states with a high percentage of distressed properties included Illinois (19.8 percent) and Connecticut (19.3 percent).
Nevada had a 7.7 percentage point drop in its distressed sales share from a year earlier, the largest decline of any state. California, meanwhile, had the largest improvement of any state from its peak distressed sales share, falling 57.8 percentage points from its January 2009 peak of 67.5 percent.
Only North Dakota and the District of Columbia are even close to their pre-recession levels, both within one percentage point.
Nationally, distressed sales accounted for 11.1 percent of total home sales, down 3 percentage points from April 2014 and down 1.5 percentage points from March 2015. CoreLogic said that distressed sales share typically decreases month over month in April because of seasonal factors.
The tally was the lowest for the month of April since 2007.
Within the distressed category, REO sales accounted for 7.4 percent and short sales made up 3.7 percent of total home sales in April. The short sales percentage fell below 4 percent in mid-2014 and has remained stable since then. At its peak in January 2009, distressed sales totaled 32.4 percent of all sales, with REO sales representing 27.9 percent.
“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,” CoreLogic said. “If the current year-over-year decrease in distressed sales share continues, the distressed sales share would reach that ‘normal’ 2 percent mark in mid-2017.”
Of the 25 largest “Core Based Statistical Areas” based on loan count, Orlando-Kissimmee-Sanford had the largest share of distressed sales at 24.7 percent, followed by Miami-Miami Beach-Kendall (23.8 percent) and Tampa-St. Petersburg-Clearwater (23.2 percent).