RealtyTrac: Short Sales Decline in October

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IRVINE, CA-The number of short sales on distressed homes nationwide decreased in October, reports RealtyTrac Inc. In addition, the number of foreclosure auction sales to third parties also decreased during the month, according to the firm.

Short sales represented 5.3% of all sales, down from 6.3% in September and down from 11.2% in October 2012. States with the highest percentage of short sales in October included Nevada, Florida, Maryland, Michigan and Illinois.

Foreclosure auction sales to third parties represented 2.5% of all sales, down from 2.8% in September, but nearly twice the 1.3% in October 2012. Markets with the highest percentage of foreclosure auction sales included Orlando; Jacksonville, FL; Columbia, SC; Las Vegas; Charlotte; Miami; and Tampa.

“After a surge in short sales in late 2011 and early 2012, the favored disposition method for distressed properties is shifting back toward the more traditional foreclosure auction sales and bank-owned sales,” says Daren Blomquist, VP at RealtyTrac. “The combination of rapidly rising home prices—along with strong demand from institutional investors and other cash buyers able to buy at the public foreclosure auction or an as-is REO home—means short sales are becoming less favorable for lenders.”

REO sales accounted for 9.6% of all sales, up from 8.9% in September and up from 9.4% in October 2012. Markets with the highest percentage of REO sales included Stockton, CA; Las Vegas; Cleveland; Riverside-San Bernardino, CA; Detroit; and Phoenix.

As GlobeSt.com reported earlier this week, “hipster zip codes,” loosely defined as markets that have an influx of trendy restaurants, bars, coffee shops and other amenities, tend to see property values and rental rates rise while vacancies and foreclosures decline. RealtyTrac has compiled a list of the top 25 hipster zip codes for rental returns in the country, and San Francisco is the only California market on the list.

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