IRVINE, CA—Housing markets in California and Florida posted the highest share of distressed sales in July, according to report from RealtyTrac. Markets with the highest share of distressed sales and short sales combined during the month were Las Vegas; Stockton, CA; Modesto, CA; Lakeland, FL; and Cape Coral-Fort Myers, FL, the report says.
As GlobeSt.com reported earlier this week, US home sales volume decreased in July from a year ago for the third straight month, according to the report. US residential properties—including single-family homes, condominiums and townhomes—sold at an estimated annual pace of roughly 4.6 million in July, down 3% from the previous month and down 12% from a year ago—the third consecutive month where annualized sales volume has decreased on a year-over-year basis.
In addition, the report shows, while pricing is at its highest level since 2008, the velocity of the increase slowed in 65% of the country’s housing markets in July. The median price of US residential properties sold last month—including both distressed and non-distressed sales—was $191,000, up 3% from the previous month, and up 12% from a year ago to a 70-month high.
Short sales and distressed sales—either in foreclosure or bank-owned—accounted for 13.6% of all single-family and condo sales in July, up from 12.8% in June, but down from 15% in July 2013. Markets bucking the national trend with a year-over-year increase in share of distressed sales and short sales combined included New Haven, CT; Louisville, KY; Boston; Youngstown, OH; and Des Moines.
Short sales accounted for 4.5% of all single-family and condo sales in July, up from 3.5% in the previous month, but down from 5.2% a year ago. Markets with the highest share of short sales in July were Lakeland, FL; Orlando; Las Vegas; Tampa; and Cape Coral-Fort Myers, FL. Markets bucking the national trend with a year-over-year increase in share of short sales included Little Rock, AR; Albany; Chicago; Virginia Beach; and Cleveland.
According to Chris Pollinger, SVP of sales at First Team Real Estate, covering the Southern California market, “Coastal areas in Southern California that were first to rebound from the distressed-heavy market last year are slowing to more long-term sustainable growth. Other areas have finally worked through their distressed inventory and are seeing significant price increases while the pent-up demand for new inventory by investors, flippers and prospective homebuyers is prevalent.”
Daren Blomquist, VP of RealtyTrac, tells GlobeSt.com, “What is driving the high share of distressed sales in certain parts of California are primarily REO sales. Meanwhile, short sales are down dramatically and sales at foreclosure auction are flat. Even though California was one of the first markets to recover, there still are some lingering foreclosures and REOs in the system that have not been disposed of because of problems with the title or other issues. What we’re seeing now is that banks are finally starting to push through some of those foreclosures and REOs that have stubbornly been lingering around. We see this in the increase in sales of REOs in some markets in the second quarter, and we see it in the increase in properties going to REO in the last few months —even in Southern California. Even in the Los Angeles/Orange County metro, we’ve now seen four consecutive months of increasing REO activity on a year-over-year basis. This will likely translate into an uptick in REO sales even in Southern California over the next few months.”