by Bill McBride on 12/12/2014 08:06:00 AM
Friday, December 12, 2014
During the recession, I started following the Sacramento market to look for changes in the mix of houses sold (equity, REOs, and short sales). For some time, not much changed. But over the last 2+ years we've seen some significant changes with a dramatic shift from foreclosures (REO: lender Real Estate Owned) to short sales, and the percentage of total distressed sales declining sharply.
This data suggests healing in the Sacramento market and other distressed markets are showing similar improvement. Note: The Sacramento Association of REALTORS® started breaking out REOs in May 2008, and short sales in June 2009.
In November 2014, 11.5% of all resales were distressed sales. This was down from 12.1% last month, and down from 15.5% in November 2013.
The percentage of REOs was at 5.3%, and the percentage of short sales was 6.2%.
Here are the statistics for November.
Click on graph for larger image.
This graph shows the percent of REO sales, short sales and conventional sales.
There has been a sharp increase in conventional (equity) sales that started in 2012 (blue) as the percentage of distressed sales declined sharply.
Active Listing Inventory for single family homes increased 36.6% year-over-year (YoY) in November. In general the YoY increases have been trending down after peaking at close to 100%, however this was a larger YoY increase than in October.
Cash buyers accounted for 16.9% of all sales, down from 25.0% in November 2013 (frequently investors). This has been trending down, and it appears investors are becoming much less of a factor in Sacramento.
Total sales were down 6.1% from November 2013, and conventional equity sales were down 1.6% compared to the same month last year.
Summary: Distressed sales down sharply, cash buyers are down significantly, and inventory up significantly (but increases slowing). This is what we'd expect to see in a healing market. As I've noted before, we are seeing a similar pattern in other distressed areas.