Resi Distressed Sales Reach 9-Year Low

IRVINE, CA—Distressed properties' share of residential sales reached a nine-year low in 2016, ATTOM Data Solutions said Thursday. The firm's Year-End 2016 US Home Sales Report shows that 16.2% of single-family home and condominium sales last year were distressed sales, down from 18.8% of all sales in 2015 and representing the lowest level since 2007.

Bank-owned (REO) sales accounted for 8% percent of all sales in '16, ATTOM says. That's down from 10% the year prior to reach a 10-year low.

Short sales, i.e. homes that sold for less than the combined amount of loans secured by the property, accounted for 5.5% of '16's home sales. That compares to 6% in '15 and marks the lowest level since 2008.

Foreclosure auctions represented 2.8% of all home sales last year. The figure represents a nine-year low, although off only slightly from the '15 level of 2.9%.

“The housing market hit several important milestones in '16, with distressed sales at a nine-year low and home prices at a 10-year high, just barely below the pre-recession peak in '06,” says Daren Blomquist, SVP at ATTOM. “This was all good news for home sellers, who realized their biggest average profits since purchase nationwide in '16. Even distressed property sellers are benefitting from this hot seller's market, with a record-high share of homes at foreclosure auction being purchased by third-party buyers rather than reverting back to the foreclosing bank.”

Conversely, third-party buyers' share of foreclosure auctions reached the highest level on record. They accounted for 28.5% of all completed auctions last year; the remaining 71.5% went back to the foreclosing lender.

Third-party buyers' share was up from 23.5% in '15, and represents the biggest share since 2000, the earliest year for which data are available. A total of 96,438 single family homes and condos were sold to third-party buyers at foreclosure auctions last year, says ATTOM.

“The increased competition at the foreclosure auction is resulting in higher sales prices there, which can even result in surplus proceeds going to the distressed homeowner in some cases after other lien holders have been paid,” Blomquist says. “Our analysis of sales prices at completed foreclosure auctions in '16 shows the smallest average loss from the property's previous sale price since '07, with 29% of properties nationwide selling for more than the previous sales price at the foreclosure auction.

He adds that in a handful of markets—including Seattle, Los Angeles, Portland, San Francisco and San Diego—“more than 50% of properties sold at foreclosure auctions in '16 sold for more than their previous sale price.”

IRVINE, CA—Distressed properties' share of residential sales reached a nine-year low in 2016, ATTOM Data Solutions said Thursday. The firm's Year-End 2016 US Home Sales Report shows that 16.2% of single-family home and condominium sales last year were distressed sales, down from 18.8% of all sales in 2015 and representing the lowest level since 2007.

Bank-owned (REO) sales accounted for 8% percent of all sales in '16, ATTOM says. That's down from 10% the year prior to reach a 10-year low.

Short sales, i.e. homes that sold for less than the combined amount of loans secured by the property, accounted for 5.5% of '16's home sales. That compares to 6% in '15 and marks the lowest level since 2008.

Foreclosure auctions represented 2.8% of all home sales last year. The figure represents a nine-year low, although off only slightly from the '15 level of 2.9%.

“The housing market hit several important milestones in '16, with distressed sales at a nine-year low and home prices at a 10-year high, just barely below the pre-recession peak in '06,” says Daren Blomquist, SVP at ATTOM. “This was all good news for home sellers, who realized their biggest average profits since purchase nationwide in '16. Even distressed property sellers are benefitting from this hot seller's market, with a record-high share of homes at foreclosure auction being purchased by third-party buyers rather than reverting back to the foreclosing bank.”

Conversely, third-party buyers' share of foreclosure auctions reached the highest level on record. They accounted for 28.5% of all completed auctions last year; the remaining 71.5% went back to the foreclosing lender.

Third-party buyers' share was up from 23.5% in '15, and represents the biggest share since 2000, the earliest year for which data are available. A total of 96,438 single family homes and condos were sold to third-party buyers at foreclosure auctions last year, says ATTOM.

“The increased competition at the foreclosure auction is resulting in higher sales prices there, which can even result in surplus proceeds going to the distressed homeowner in some cases after other lien holders have been paid,” Blomquist says. “Our analysis of sales prices at completed foreclosure auctions in '16 shows the smallest average loss from the property's previous sale price since '07, with 29% of properties nationwide selling for more than the previous sales price at the foreclosure auction.

He adds that in a handful of markets—including Seattle, Los Angeles, Portland, San Francisco and San Diego—“more than 50% of properties sold at foreclosure auctions in '16 sold for more than their previous sale price.”