A new CoreLogic report shows that falling REO numbers are helping bolster home sales and reduce distressed sales.
Distressed sales, including real estate-owned and short sales, continued tumbling in February, falling 0.8 percentage points from January and 3 percentage points year-over-year, according to a new analysis from CoreLogic.
Nationally, distressed sales accounted for 13.5 percent of total home sales, with REO making up 9.7 percent and short sales 3.8 percent. February’s numbers represent the lowest share of distressed sales since Feb. 2008 – to put the figure into perspective, in Jan. 2009, distressed sales made up 32.4 percent of total sales.
Nationally, falling shares of REO sales are helping to drive up home prices, as bank-owned properties typically sell at a larger discount than short sales. Historically speaking, though, distressed sales are still high. Prior to the economic downturn, distressed sales tended to make up 2 percent of total sales. By CoreLogic’s own calculations, and considering current year-over-year decreases, if the pace remains distressed sales share should reach the “normal” 2 percent level by mid-2017.
Check out our graph below for a stark reminder of how quickly distressed properties flooded the market following the 2007 crash.