By Peter Ricci
One of the more interesting real estate surveys out there is the HousingPulse Tracking Survey from Campbell Surveys and Inside Mortgage Finance, a broad look at the real estate markets and the preeminent issues and trends on agents minds.
And the latest survey brought good news! The survey was prepared in anticipation of the presidential election and sampled 2,500 agents, and provided further evidence of what has been a highly encouraging trend in real estate – the lessening market share of distressed properties.
HousingPulse Survey and Distressed Properties
As we and other outlets continue to point out, one of the most important indicators of the real estate recovery is and how large of a share distressed properties are in existing-home sales, which has been disproportionally large in the post-boom housing market. As the HousingPulse Survey found, though, that scenario is gradually improving:
- The HousingPulse Distressed Property Index, which tracks the proportion of distressed property transactions, found that 38.6 percent of transactions in September were for distressed properties (on a three-month moving average).
- That’s the fifth straight month of declines for the index, and it has fallen by more than 10 percentage points from the near-record-high of 48.7 percent in February 2012.
- Those decreases, the survey also found, have also played a big role in home prices, which have been rising steadily throughout 2012.
Where is Distressed Housing Inventory Heading?
The HousingPulse Survey did point out one other key fact on distressing housing inventory – though there are less distressed properties on the market, the reason for that shortage is careful business by banks. After the robo signing scandals of 2010, banks have been much more careful in managing their distressed housing inventories, and rather than flood the market with REOs and foreclosures, they’ve opting to instead for a slow stream of properties.
Frank DeNovi, though, the REO Director of Operations for Coldwell Banker Residential Brokerage in Arlington Heights, said that with the heightened foreclosure activity underway in Chicago, he anticipates distressed property sales to increase in the area.
“I see a major uptick in distressed properties over the next 12 to 24 months in Illinois,” DeNovi said. “Illinois had a 34 percent increase in foreclosure activity in the third quarter. This is more than double the national average.”
Miami: And that, interestingly, is exactly what Iliana Abella, of Greater Miami Investments and the Masters Brokers Forum, anticipates for the Miami real estate markets. Back in 2007 and 2008, when foreclosures were running rampant in Miami, Abella said there were a preponderance of distressed properties in the city, and she regularly had 14 to 15 at any given time; now, though, she averages seven to eight, and she regularly gets one new listing a month.
But now, the banks are being more careful, which she said is a good thing; the greater balance in Miami’s inventory has allowed for its recent increases in home prices, which has garnered national attention.
Houston: Robyn Jones, the owner of Robyn Jones homes in Houston, said the decline in distressed sales is consistent with the markets she follows.
“While we still have a high number of distressed sales in this area, we have an extremely high number of retail sales from consumers moving up or down in size, being transferred in or out of the area or just taking advantage of the historically low interest rates,” she said. “Of course, we hope to see the sales of the non-distressed homes continue to rise in 2013 to keep the Houston area growing!”