Distressed home sales were once the most visible characteristic of the housing market, but they’ve taken a much-desired back seat in recent months.
Buried in NAR’s latest existing-home sales report was a precious nugget of housing news – in March 2014, distressed home sales accounted for just 14 percent of all sales. That’s a 38 percent decline from a year ago, and is the strongest sign yet that housing, as it rids itself of distressed inventory, is on a solid path to recovery.
That 14 percent, though, got us thinking – just how far have distressed home sales fallen in the last three years? To find out, we combed through old NAR data and put together the following chart, which tracks distressed home sale percentages from March 2011 to the present day.
The results, as you can see, are highly encouraging:
I would have liked to have seen the pre-bubble percentage of distressed sales to see what “normal” looks like. There will always be some distressed volume even in a stable market.
I would never have thought in 2007 that I would be doing short sales in 2014. In 2007, when the market crashed (for me at least), I was 4 years +/- in the business. 7 years later I have spent more than half my career doing short sales and working with troubled homeowners. There is no doubt a major shift in the market. Thankfully, in the last 5 months Fannie Mae seems to also be a bit more negotiable than they were the 2nd half of last year. This is also helping us clear out the old distressed inventory. Although, there is still plenty of Chicagoland folks in trouble with their mortgages. So the fight continues!