Thursday, December 08, 2011

Distressed House Sales using Sacramento Data for November

by Bill McBride on 12/08/2011 07:30:00 PM

I've been following the Sacramento market to look for changes in the mix of house sales in a distressed area over time (conventional, REOs, and short sales). The Sacramento Association of REALTORS® started breaking out REOs in May 2008, and short sales in June 2009.

This will be interesting once something changes - and not much has changed yet. At some point, the number and percent of distressed sales should start to decline (excluding seasonal factors and market distortions like the home buyer tax credit).

The percent of distressed sales in Sacramento was unchanged in November compared to October. In November 2011, 64.1% of all resales (single family homes and condos) were distressed sales. This was down slightly from 66.1% in November 2010.

Here are the statistics.

Distressed Sales Click on graph for larger image.

This graph shows the percent of REO sales, short sales and conventional sales. There is a seasonal pattern for conventional sales (stronger in the spring and summer), and distressed sales happen all year - so the percentage of distressed sales decreases every summer and the increases in the fall and winter.

Total sales were up 14.6% compared to November 2010. Active Listing Inventory were down 38.1% from last November, although "short sale contingent" has increased. Cash buyers accounted for 27.4% of all sales (frequently investors), and median prices are off about 8% from last November.

This data might be helpful in determining when the market is improving. So far it looks like REO sales have declined (this is the lowest percentage of REO sales since Sacramento started breaking out REOs), offset by an increase in short sales, so overall there is no improvement.