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Friday, October 18, 2013

Lawler: Updated Table of Distressed Sales and Cash buyers for Selected Cities in September

by Calculated Risk on 10/18/2013 10:03:00 AM

Economist Tom Lawler sent me the updated table below of short sales, foreclosures and cash buyers for several selected cities in September. 

Comments from CR: Tom Lawler has been sending me this table every month for a couple of years (or longer). I think it is very useful for looking at the trend for distressed sales and cash buyers in these areas. I sincerely appreciate Tom sharing this data with us.

Look at the first two columns in the table for Short Sales Share.  Short sales are down sharply from a year ago, and will probably really decline in early 2014.  It appears that the Mortgage Debt Relief Act of 2007 will not be extended again next year. Usually cancelled debt is considered income, but a provision of the 2007 Debt Relief Act allowed borrowers "to exclude certain cancelled debt on [a] principal residence from income. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualifies for the relief." (excerpt from IRS).  This relief expires on Dec 31, 2013.  As I've written before, plan to complete all short sales by the end of this year! 

Total "Distressed" Share. In most areas the share of distressed sales is down year-over-year (Hampton Roads is an exception).  Also there has been a decline in foreclosure sales in all of these cities except Springfield, Ill.  

The All Cash Share is declining in some cities (Phoenix, Las Vegas, Sacramento, Orlando), but steady in other areas.  When investors pull back in markets like Phoenix (already declining), the share of all cash buyers will probably decline.

In general it appears the housing market is slowly moving back to normal.

 Short Sales ShareForeclosure Sales Share Total "Distressed" ShareAll Cash Share
Las Vegas23.0%44.8%7.4%13.6%30.4%58.4%47.2%54.8%
Mid-Atlantic 7.7%12.4%8.2%9.4%15.9%21.8%18.4%18.8%
Bay Area CA*8.6%27.5%3.6%14.1%12.2%41.6%24.0%28.4%
So. California*13.1%28.0%6.3%16.6%19.4%44.6%27.6%32.2%
Hampton Roads    26.1%25.4%  
Northeast Florida    34.9%44.1%  
Chicago    31.0%41.0%  
Hampton Roads    26.1%25.4%  
Toledo      38.1%35.9%
Tucson      29.8%29.7%
Omaha      19.1%15.8%
Pensacola      27.3%34.4%
Des Moines      19.2%19.9%
Houston  7.4%16.1%    
Memphis*  18.4%26.6%    
Birmingham AL  20.9%26.6%    
Springfield IL  14.2%13.5%    
*share of existing home sales, based on property records