Distressed residential home sales continued their decline in March 2015, accounting for 12.1 percent of all residential sales – a drop of 3.2 percentage points year-over-year, according to CoreLogic's March 2015 Distressed Sales report released Monday.
March's distressed sales share was the lowest percentage for any March since 2007. According to CoreLogic, distressed sales usually experience a month-over-month decline in March due to seasonality; this past March, the distressed sales share fell by 1.9 percentage points from February.
According to CoreLogic, 8.4 percent of home sales were REO (real estate-owned) transactions in March 2015, while 3.7 percent were short sales, totaling 12.1 percent.
With the latest decline, the distressed sales share has fallen about 63 percent from their peak experienced in January 2009, when distressed sales made up 32.4 percent of all residential home sales. During that peak month, REO sales accounted for 27.9 percent of all home sales, according to CoreLogic.
"There will always be some amount of distress in the housing market, and by comparison, the pre-crisis share of distressed sales was traditionally about 2 percent," CoreLogic said in the report. "If the current year-over-year decrease in distressed sales share is maintained, the distressed sales share would reach that 'normal' 2-percent mark in mid-2017."
The state with the largest distressed sales share was Michigan, where distressed sales made up 22.1 percent of all home sales. Following close behind were Florida (22 percent), Illinois (20.1 percent), Maryland (19.5 percent), and Connecticut (19.1 percent). Among states, Nevada experienced the largest year-over-year decline of distressed sales share in March at 8 percentage points, while California was the state with the largest decline from its peak (falling 57.6 percentage points from its January 2009 peak share of 67.5 percent).
Among the 25 core-based statistical areas (CBSAs) with the highest loan count, the three with the highest distressed sales share were all located in Florida. The CBSA with the highest share was Orlando-Kissimmee-Sanford, Florida at 24.6 percent, followed by Miami-Miami Beach-Kendall, Florida (24.2 percent), Tampa-St. Petersburg-Clearwater, Florida (23.5 percent), Chicago-Naperville-Arlington Heights, Illinois (22.9 percent), and Baltimore-Columbia-Towson, Maryland (19.2 percent). The CBSA with the largest year-over-year distressed sales share decline in March was Atlanta-Sandy Springs-Roswell, Georgia (falling 8.8 percentage points from 24.5 percent down to 15.7 percent), while the CBSA with the largest decline from its peak total was Riverside-San Bernardino-Ontario, California (down to 12.9 percent in March 2015 from its peak of 76.3 percent in February 2009).