Up From 14.5 Percent of All Sales in 2012 Despite Declining Short Sales Late in Year
Share of Sales to Third-Party Buyers at Foreclosure Auction Doubles in 2013
Cash Sales and Institutional Investor Purchases Also Up Substantially for Year
IRVINE, Calif. – Jan. 23, 2014 — RealtyTrac® (www.realtytrac.com), the nation’s leading source for comprehensive housing data, today released its December and Year-End 2013 U.S. Residential & Foreclosure Sales Report, which shows that U.S. residential properties, including single family homes, condominiums and townhomes, sold at an estimated annual pace of 5,167,255 in December, a less than 1 percent increase from the previous month and a 10 percent increase from December 2012.
Counter to the national trend, annualized sales volume declined from a year ago in 18 of the nation’s 50 largest metropolitan statistical areas and was down in five states: California, Arizona, Nevada, Rhode Island and Oregon.
The national median sales price of U.S. residential properties — including both distressed and non-distressed sales — was $168,391 in December, virtually unchanged from November and up 2 percent from December 2012.
The median price of a distressed residential property — in foreclosure or bank-owned — was $108,494 in December, 38 percent below the median price of $174,401 for a non-distressed residential property.
The report also shows that short sales and foreclosure-related sales — including both sales to third party buyers at the public foreclosure auction and sales of bank-owned properties — accounted for a combined 16.2 percent of all U.S. residential sales in 2013, up from 14.5 percent of all sales in 2012 and up from 15.2 percent of all sales in 2011.
“It may surprise some to see distressed sales rising in 2013 given that foreclosure starts dropped to a seven-year low for the year,” said Daren Blomquist, vice president at RealtyTrac. “And while short sales did trend lower in the second half of the year, there are still more than 1.2 million properties in the foreclosure process or bank-owned, providing a sizable pool of inventory that the housing market is in the process of absorbing. Meanwhile, non-distressed sellers have not listed their homes for sale in droves, helping to keep the distressed share of sales at a stubbornly high level.”
Other high-level findings from the report:
- Sales of bank-owned properties (REO) accounted for 9.3 percent of all U.S. residential sales in December, up from 8.7 percent in the previous month and 9.2 percent in December 2012.
- States with the highest percentage of REO sales in December were Nevada (18.9 percent), Michigan (18.4 percent), Ohio (17.8 percent), Arizona (15.7 percent), and Illinois (14.7 percent).
- More than 436,000 REO properties sold in 2013, accounting for 9.3 percent of all U.S. residential sales, up from 9.1 percent in 2012 and up from 8.7 percent in 2011.
- Short sales (where the sale price is below the total amount of outstanding loans secured by the property) accounted for 5.7 percent of all U.S. residential sales in December, up from 5.1 percent in November but down from 6.7 percent in December 2012.
- States with the highest percentage of short sales in December were Nevada (15.3 percent), Florida (14.4 percent), Illinois (9.0 percent), Maryland (8.2 percent), New Jersey (7.9 percent), and Michigan (7.2 percent).
- More than 256,000 short sales occurred in 2013, accounting for 5.8 percent of all U.S. residential sales, up from 4.9 percent of all sales in 2012 but down from 6.0 percent of all sales in 2011.
- Sales to third-party investors at the foreclosure auction accounted for 1.2 percent of all U.S. residential sales in December, up from 1.1 percent in November and up from 0.8 percent in December 2012.
- Major metros where third party foreclosure auction sales accounted for at least 2.5 percent of all residential sales included Atlanta (4.7 percent), Orlando (3.9 percent), Miami (3.9 percent), Tampa (3.4 percent), Columbia, S.C. (2.8 percent), Las Vegas (2.8 percent), and Charleston, S.C. (2.8 percent).
- More than 48,000 U.S. properties sold to third parties at foreclosure auction in 2013, accounting for 1.0 percent of all U.S. residential sales, up from 0.5 percent of sales in 2012 and 0.5 percent of sales in 2011.
- All-cash purchases accounted for 42.1 percent of all U.S. residential sales in December, up from a revised 38.1 percent in November, and up from 18.0 percent in December 2012.
- States where all-cash sales accounted for more than 50 percent of all residential sales in December included Florida (62.5 percent), Wisconsin (59.8 percent), Alabama (55.7 percent), South Carolina (51.3 percent), and Georgia (51.3 percent).
- For all of 2013, 29.1 percent of U.S. residential sales were all-cash purchases, but the percentage trended substantially higher in the second half of the year. The 29.1 percent in 2013 was up from 19.4 percent in 2012 and 20.6 percent in 2011.
- Institutional investor purchases (comprised of entities that purchased at least 10 properties in a year) accounted for 7.9 percent of all U.S. residential sales in December, up from 7.2 percent the previous month and up from 7.8 percent in December 2012.
- Metro areas with the highest percentages of institutional investor purchases in December included Jacksonville, Fla., (38.7 percent), Knoxville, Tenn., (31.9 percent), Atlanta (25.2 percent), Cape Coral-Fort Myers, Fla. (24.9 percent), Cincinnati (19.3 percent), and Las Vegas (18.2 percent).
- For all of 2013, institutional investor purchases accounted for 7.3 percent of all U.S. residential property purchases, up from 5.8 percent in 2012 and 5.1 percent in 2011.
Local broker quotes
“One-third of Nevada mortgages are still underwater, but we don’t see distressed sales having a huge effect on the marketplace this year,” said Craig King, COO of Chase International, covering the Reno, NV and Lake Tahoe markets. “A significant declining number of short sales and foreclosures are still sought after by potential homeowners and investors, but a majority of the market is back to equity sales in the Reno-Sparks MSA and we look forward to it staying that way.”
“The new Dodd-Frank legislation defining qualified mortgages is definitely going to influence sales in the first quarter because fewer people are going to be able to qualify for loans, which results in fewer buyers in the market,” said Sheldon Detrick, CEO of Prudential Detrick/Alliance Realty, covering the Oklahoma City and Tulsa, Okla., markets. “Interest rates are higher, mortgage insurance is also increasing and the decrease in REO inventory will result in fewer investor sales, which all add up to a slower first quarter.”
The RealtyTrac U.S. Residential Sales Report provides counts and median prices for sales of residential properties nationwide, by state and metropolitan statistical areas with a population of 500,000 or more. Data is also available at the county level upon request. The report also provides a breakdown of cash sales, institutional investor sales, short sales, bank-owned sales and foreclosure auction sales to third parties. The data is derived from recorded sales deeds and loan data, which is used to determine cash sales and short sales. Sales counts for recent months are projected based on seasonality and expected number of sales records for those months that are not yet available from public record sources but will be in the future given historical patterns. Statistics for previous months are revised when each new monthly report is issued as more deed data becomes available for those previous months.
Important methodology note: Starting with this October report, RealtyTrac has adjusted the methodology for the report as it concerns short sales — now applying a refined calculation to take into account the true loan balance secured by a home at the time of the sale, and additionally separating out of the short sale classification properties that sell at the public foreclosure auction short of the loan balance.
Related to this second change, RealtyTrac is now including a new category of distressed sale in the report: third-party foreclosure auction sales, which represent sales at the public foreclosure auction to third parties other than the foreclosing lender.
Residential property sales: sales of single family homes, condominiums/townhomes, and co-ops, not including multi-family properties.
Annualized sales: an annualized estimate of the number of residential property sales based on the actual number of sales deeds received for the month, accounting for expected sales records for that month that will be received in future months as well as seasonality.
Distressed sales: sale of a residential property that is actively in the foreclosure process or bank-owned when the sale is recorded.
Distressed discount: percentage difference between the median price of distressed sales and a non-distressed sales in a given geographic area.
Bank-Owned sales: sales of residential properties that have been foreclosed on and are owned by the foreclosing lender (bank).
Short sales: sales of residential properties where the sale price is below the combined total of outstanding mortgages secured by the property.
Foreclosure Auction sales: sale of a property at the public foreclosure auction to a third party buyer that is not the foreclosing lender.
All-cash purchases: sales where no loan is recorded at the time of sale and where RealtyTrac has coverage of loan data.
Institutional investor purchases: residential property sales to non-lending entities that purchased at least 10 properties in the last 12 months.
The RealtyTrac U.S. Residential & Foreclosure Sales report is the result of a proprietary evaluation of information compiled by RealtyTrac; the report and any of the information in whole or in part can only be quoted, copied, published, re-published, distributed and/or re-distributed or used in any manner if the user specifically references RealtyTrac as the source for said report and/or any of the information set forth within the report.
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RealtyTrac (www.realtytrac.com) is the leading supplier of U.S. real estate data, with more than 1.5 million active default, foreclosure auction and bank-owned properties, and more than 1 million active for-sale listings on its website, which also provides essential housing information for more than 100 million homes nationwide. This information includes property characteristics, tax assessor records, bankruptcy status and sales history, along with 20 categories of key housing-related facts provided by RealtyTrac’s wholly-owned subsidiary, Homefacts®. RealtyTrac’s foreclosure reports and other housing data are relied on by the Federal Reserve, U.S. Treasury Department, HUD, numerous state housing and banking departments, investment funds as well as millions of real estate professionals and consumers, to help evaluate housing trends and make informed decisions about real estate.
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