by Bill McBride on 12/13/2012 02:44:00 PM
Thursday, December 13, 2012
Note: 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.
Recently there has been a dramatic shift from REO to short sales, and the percentage of distressed sales has been declining. This data would suggest some improvement in the Sacramento market.
In November 2012, 47.6% of all resales (single family homes and condos) were distressed sales. This was down slightly from 47.7% last month, and down from 64.1% in November 2011. The is the lowest percentage of distressed sales - and therefore the highest percentage of conventional sales - since the association started tracking the data.
The percentage of REOs fell to 11.5%, the lowest since the Sacramento Realtors started tracking the data and the percentage of short sales increased to 36.1%, the highest percentage recorded.
Here are the statistics.
Click on graph for larger image.
This graph shows the percent of REO sales, short sales and conventional sales.
There has been an increase in conventional sales this year, and there were more than three times as many short sales as REO sales in November (the highest recorded). The gap between short sales and REO sales is increasing.
Total sales were up slightly from November 2011, and conventional sales were up 46% compared to the same month last year. This is exactly what we expect to see in an improving distressed market - flat or even declining overall sales as distressed sales decline, but an increase in conventional sales.
Active Listing Inventory for single family homes declined 56.7% from last November, although listings were up 2% in November compared to October.
Cash buyers accounted for 37.1% of all sales (frequently investors), and median prices were up sharply year-over-year (the mix has changed).
This seems to be moving in the right direction, although the market is still in distress. We are seeing a similar pattern in other distressed areas to more conventional sales, and a shift from REO to short sales.