Michigan, Florida Top States for Sales of Distressed Homes
ThinkstockU.S. sales of distressed homes totaled 9.9% of all homes sold in May of this year according to data from CoreLogic and published Thursday on the company’s blog. The total represents a 2.8% drop compared with May of 2014 and…
U.S. sales of distressed homes totaled 9.9% of all homes sold in May of this year according to data from CoreLogic and published Thursday on the company’s blog. The total represents a 2.8% drop compared with May of 2014 and a drop of 1.7% compared with April of this year.
A distressed sale is a transaction involving a real estate-owned (REO) property or a short sale. In May REO sales accounted for 6.4% of all home sales and short sales accounted for 3.5% of all sales in the month. At the peak of distressed sales in January 2009, 32.4% of all sales were distressed, including REO sales totaling 27.9% of all sales.
The CoreLogic report noted:
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. There will always be some amount of distress in the housing market, and by comparison, the pre-crisis share of distressed sales was traditionally about 2 percent. If the current year-over-year decrease in distressed sales share is maintained, the distressed sales share would reach that “normal” 2-percent mark in mid-2018.
The 5 states with the largest percentage of distressed sales were Michigan (21.4%), followed by Florida (21.3%), Maryland (20.3%), Illinois (19.4%), and Connecticut (19.3%). Only North Dakota and the District of Columbia remain within one point of their respective pre-crisis distressed sales shares. Nevada had a 7-point drop in its distressed sales share from a year earlier, the largest decline of any state, and California had the largest improvement of any state from its peak distressed sales share, falling 58.1% from its January 2009 peak of 67.5%.
Among the 25 largest metropolitan areas these 5 posted the largest percentage of distressed sales:
- Orlando-Kissimmee-Sanford, Florida (24.6%)
- Miami-Miami Beach-Kendall, Florida (23.3%)
- Tampa-St. Petersburg-Clearwater, Florida (22.9%)
- Chicago-Naperville-Arlington Heights, Illinois (22.2%)
- Baltimore-Columbia-Towson, Maryland (20.1%).
Atlanta-Sandy Springs-Roswell, Georgia, had the largest year-over-year drop in its distressed share, falling by 7.6 points from 22.4% in May 2014 to 14.8% in May 2015.
ALSO READ: How Obamacare Increased Insurance Coverage in Every State
Contact [email protected] for any questions or corrections.
Paul Ausick has been writing for 247Wallst.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.
He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.
