Monday, February 13, 2012

Distressed House Sales using Sacramento Data for January

by Bill McBride on 2/13/2012 09:53:00 AM

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 significantly. So far there has been a shift from REO to short sales, and the percentage of distressed sales has declined year-over-year. The percent of distressed sales in Sacramento increased in January compared to December 2011; the normal seasonal pattern. Usually January has the largest percentage of short sales for the year.

In January 2012, 66.6% of all resales (single family homes and condos) were distressed sales. This was down from 73.1% in January 2011, and the lowest percentage of January distressed sales since Sacramento started breaking out the data.

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 4.7% compared to January 2011. Active Listing Inventory declined 49.4% from last January, and total inventory, including "short sale contingent", was off almost 30% year-over-year.

Cash buyers accounted for 32.4% of all sales (frequently investors), and median prices are off 5.9% from last January.

This data might be helpful in determining when the market is improving. So far it looks like REO sales have declined, partially offset by an increase in short sales, and a small decline in the total percent of distressed sales. This data might also show if there is a surge in distressed sales following the mortgage servicer settlement.

Also inventory has plummeted - even inventory including "short sale contingent" listings.