CoreLogic’s May distressed sales report shows lowest levels since 2007

CoreLogic recently released a new report detailing the state of the distressed sales market in the U.S. for May, and for another month, both real-estate owned (REO) and short sales saw their market shares drop. Overall, distressed sales market share dropped 2.8 percentage points year-over-year to its lowest point for the month of May since 2007.

In Jan. 2009, when distressed sales were at their peak, holding a 32.4 percent share of all sales, the majority were comprised of REO sales (27.9 percent). Since that time, the market relevance of REOs has waned considerably. In May, REO sales accounted for only 6.4 percent of total home sales – the lowest level since Oct. 2007 when REO sales were at 6 percent.

Short sales in May accounted for 3.5 percent of total sales. In Mid-2014, short sales dipped below 4 percent, and since that time levels have remained stable.

In the report, CoreLogic projections suggest that at the current pace, distressed sales share should return to pre-crisis levels of about 2 percent by mid-2018.

In Miami, the market share of distressed sales has fallen nearly 10 percentage points since May 2013. However, the city’s levels remain relatively high, particularly that of REOs. Short sales have fallen, steadily, to near healthy levels at 4.68 percent. But reviewing the graph below, the path REOs have taken over the last two years has been something of a rollercoaster. In May, REOs held a 14.11 percent market share, which is just below the 14.57 percent share in May 2013, but only recently that level was more than 20 percent. The hope is that the downward trajectory of REOs in Miami will remain.