In Depth Analysis: CalculatedRisk Newsletter on Real Estate (Ad Free) Read it here.

Tuesday, May 10, 2011

Distressed House Sales using Sacramento data

by Calculated Risk on 5/10/2011 03:51:00 PM

The percent of distressed sales in Sacramento declined in April compared to March, because of a seasonal pickup in conventional sales, but this is the highest percentage of distressed sales for the month of April, since the Sacramento Association of REALTORS® started breaking out REOs in May 2008, and short sales in June 2009.

This should be no surprise after Fannie and Freddie announced record REO sales in Q1. And we should see a high level of REO sales all year (putting pressure on house prices).

Note: I've been following the Sacramento market to see the change in mix (conventional, REOs, short sales) in a distressed area. Here are the statistics.

Distressed Sales Click on graph for larger image in graph gallery.

This graph shows the percent of REO, short sales and conventional sales. There is a seasonal pattern for conventional sales (strong in the spring and summer), and distressed sales happen all year - so the percentage of distressed sales increases every winter. The tax credits might have also boosted conventional sales in 2009 and early 2010.

Note: Prior to June 2009, it is unclear if short sales were included as REO or as "conventional" - or some of both.

In April 2011, 66.8% of all resales (single family homes and condos) were distressed sales. This is highest level of distressed sales for an April since Sacramento started breaking out distressed sales.

A high level of distressed sales suggests falling prices, and this data from Sacramento suggests further price declines in April.