- DSNews - https://dsnews.com -

REO Cash Sales Share Rebounds From Seasonal Decline

reo [1]After a slight dip in December likely due to seasonality, REO sales once again had a 60 percent cash sales share for January, according to CoreLogic's January 2015 cash sales report released Thursday.

Sixty percent of REO sales in January were cash sales, up from 58.4 percent in December – and a decline from 61.1 percent share from November. At the time, CoreLogic senior economist Molly Boesel noted the pattern of November-to-December declines in REO sales cash sales share every year since 2010, indicating that seasonality was likely responsible for the decrease. Boesel predicted that the REO cash share had the potential to raise back up close to 60 percent by the end of the year – which it did in January, reaching exactly 60 percent.

As has historically been the case, REO sales had the largest cash sales share in January. Re-sales had the second-largest cash sales share at 38.5 percent, followed by short sales (34.5 percent) and newly-constructed homes (17.3 percent), according to CoreLogic.

While the percentage of REO sales that were cash sales took a hike in January, so did the percentage of all home sales that were REO sales – from 8.8 percent in December up to 9.9 in January – again back up very close to November's total of 10 percent. Still, REO sales had a small influence on overall cash sales, which made up 38.9 percent of all home sales in January – marking the 25th consecutive month of year-over-year declines. The cash sales share of total home sales prior to the housing crisis averaged 25 percent; CoreLogic estimates that if the share continues to decline at its current pace, it will fall below 25 percent around the middle of 2018. In January 2011 at the height of the foreclosure wave, when cash sales reached their peak, REO sales made up 23.9 percent of all home sales.