Distressed home sales still stressing the market

Oct. 24, 2013 at 9:36 AM
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IRVINE, Calif., Oct. 24 (UPI) -- The sale of distressed homes in the United States remained "persistently high," in September, online real estate firm RealtyTrac said Thursday.

RealtyTrac said 25 percent of all home sales in the month involved distressed properties, which are either bank-owned or in the process of foreclosure.

That is up from 18 percent in September 2012, the company said.

"Distressed sales remain persistently high, particularly short sales," said Daren Blomquist, vice president at RealtyTrac, referring to sales in which the price falls short of what is owned on the property.

"Markets with the biggest increases in short sales tend to be those where either foreclosure starts or scheduled foreclosure auctions have rebounded in the last 18 months -- translating into more motivated short sellers -- or those with a still-high percentage of underwater homeowners with negative equity," Blomquist said in a statement.

RealtyTrac said home sales rose by 2 percent from August to September and climbed 14 percent from September 2012, as sales reached an estimated annual pace of 5,673,249 per year.

The median sales price for all homes sold came to $174,000 in September, up 1 percent from August and up 6 percent from the median sales price of $164,500 in September 2012, the firm said.

The median price for a distressed home in September was $112,000, a price 41 percent lower than the median price of non-distressed homes, which came to $189,000 in the month.

"The housing market continues to skew in favor of investors, particularly deep-pocketed institutional investors, and other buyers paying with cash," Blomquist said.

Institutional investors are those defined as buyers who have purchased 10 properties or more in the past 12 months. Economists, however, say the housing market recovery cannot be sustained without greater participation by first-time buyers who intend to live in the homes they buy.

In September, institutional investors accounted for 14 percent of all home sales in September, up from 9 percent in August and up from 9 percent in September 2012, RealtyTrac said.

"September had the highest percentage of institutional investor purchases of any month since RealtyTrac began tracking in January 2011," the firm said.

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