RealtyTrac Reports Distressed Condo Sales Continue to Drop
- Dec 31, 2014
Washington, D.C.—The percentage of distressed condo sales nationwide continues to drop, according to a year-end report by RealtyTrac. The downward movement of distressed condo sales mirrors the overall decline in the percentage of residential properties sold under such circumstances, befitting the overall recovery of the economy and the tepid but revived U.S. residential market.
The report breaks down distressed transactions into three categories: short sales, REOs and foreclosure auctions. As of November 2014, 5.5 percent of condo sales were short sales, compared with 5.9 percent the month before and 6.4 percent a year earlier.
As of November this year, REO sales represented 6.3 percent of condo transactions nationwide, up from the previous month’s total of 5.9 percent, but down from 7 percent in November 2013. Foreclosure auctions represented an even 1 percent of all condo sales in November, the same as in October. But in November 2013, foreclosure auctions represented 1.1 percent of condo sales.
RealtyTrac reported that short sales and distressed sales—in foreclosure or bank-owned—combined accounted for 12.6 percent of all residential property sales (single-family and condo) in November, down from 13.7 percent the previous month, and down from 14.8 percent in November 2013. Metro areas with the highest percentage of distressed and short sales combined were Las Vegas (36.3 percent); Stockton, Calif., (27.6 percent); Miami (26.9 percent); Jacksonville, Fla., (25.1 percent), and Modesto, Calif. (25.1 percent).
As the number of distressed sales drops, the number of convention sales rises. Much of the increase is now being fueled by first-time homebuyers (many of whom chose condos).
“First-time homebuyers are the key to a sustainable housing recovery,” RealtyTrac vice president Daren Blomquist tells MHN. “In early December, Fannie Mae and Freddie Mac put new lending guidelines in place and started offering 3 percent down payment mortgages that will make it easier for more first-time buyers to qualify for a mortgage. Add to that a strengthening job market, and the future looks much brighter for young homebuyers. Finally, home builders are ramping up production of smaller homes to accommodate these new entry-level buyers.”