Distressed Homes Sales on the Decline

Distressed home sales made up for 9.4 percent of total U.S. home sales in July, according to new data released by CoreLogic. July’s volume–which includes real estate-owned properties (REOs) and short sales–is down 2.1 percentage points on a year-over-year basis and down 0.4 percentage points on a month-over-month measurement.

REO sales accounted for 6.1 percent of total home sales in July–the lowest share since September 2007–while short sales took up 3.3 percent of the volume. CoreLogic noted that the trend away from REO sales “is a driver of improving home prices since bank-owned properties typically sell at a larger discount than short sales.”

Florida had the largest share of distressed sales of any state at 20.7 percent in July, followed by Maryland (20.6 percent), Michigan (20.2 percent), Connecticut (19.1 percent) and Illinois (18.9 percent). Nevada had the greatest year-over-year decline in distressed sales (a 6.4 percentage point tumble). Three Florida metro markets had the largest share of distressed sales: Orlando-Kissimmee-Sanford at 23.8 percent, Miami-Miami Beach-Kendall at 22.3 percent) and Tampa-St. Petersburg-Clearwater at 22.3 percent. Michigan’s Warren-Troy-Farmington Hills market had the largest year-over-year drop in its distressed sales share, falling by 6.6 percentage points from 19.8 percent in July 2014 to 13.2 percent in July 2015.