Distressed homes, foreclosures and short sales, which are sold at a discount and depress home values, have fallen to the lowest levels since 2009 and are still dropping, according to the latest November market reports. Fewer discounted distressed sales contribute to forecasts of improving prices in the new year.
Foreclosures and short sales accounted for 22 percent of November sales (12 percent were foreclosures and 10 percent were short sales), down from 24 percent in October and 29 percent in November 2011. Foreclosures sold for an average discount of 20 percent below market value in November, while short sales were discounted 16 percent, the National Association of Realtors reported yesterday.
Today the Campbell/Inside Mortgage Finance HousingPulse Tracking Survey said that its HousingPulse Distressed Property Index dropped to its lowest level in three years in November. Just 33.7% of the home purchase transactions tracked last month involved distressed properties. This was down from 41.4 percent a year earlier and from a record-high of 45.6 percent in March 2011.big factor having a positive impact on the housing market, particularly home prices, is a continuing decline in distressed properties.
In California, the total of pre-foreclosures, properties in foreclosure that are scheduled for sale, and bank owned properties (REO)-fell 7.6 percent from October to November and is down 31.8 percent compared to last year. While the November decline in inventory is not an unusual event, the significant decline in foreclosure inventory over the past year has contributed to what some are calling an “inventory crisis” of total homes for sale, reported ForeclosureRadar.