Posted on Monday, September 20, 2010
CORELOGIC on Thursday announced the inaugural release of its U.S. Housing and Mortgage Trends report, a bi-monthly study of housing sales, valuation, negative equity, and foreclosure activity and trends.
The California-based research firm says its data indicate “more distress with distressed home sales.”
According to the report, distressed sales are at a seven-month low with the decline due primarily to tax credit-induced increases in overall home sales. But now that this incentive has run its course, CoreLogic says the share of distressed sales is expected to rise in the fall.
The company defines distressed sales as REO and short sale transactions. In June, the distressed sale share fell to 24 percent of overall sales. According to CoreLogic, the decline was assisted by the increase in non-distressed sales as a
result of government-sponsored tax credits, and by a decline in REO sales, which fell to 16 percent.
The distressed sale share hit its peak of 35 percent back in early 2009.
As of June 2010, Las Vegas (61 percent) and Riverside (59 percent) continue to lead the nation in distressed sales for the largest 25 metropolitan markets.
Phoenix (53 percent), Sacramento (51 percent), and Orlando (50 percent) were the only other markets where distressed sales accounted for the majority of home sales activity.
At the other end of the spectrum, Nassau (5 percent) and New York City (8 percent) had the lowest distressed sale share, followed by Baltimore (18 percent), Seattle (19 percent), and Minneapolis (19 percent).
The report explains that with the expiration of the tax credit the distressed sale share is expected to rise moderately during the late summer and become more acute during the fall. Typically during the fall season, non-distressed seasonal rates begin to decline anyway. CoreLogic says the anticipated increased in distressed sales will serve to “further depress the market.”
CoreLogic adds that in addition to the post-tax-credit effects on sales, negative equity rates will also be a major factor slowing the housing recovery, with nearly one in four homeowners underwater and most of those borrowers unable to sell their homes. - DSNews