Distressed sales accounted for 12.5% of all home sales in the third quarter, down from 13.5% in the previous quarter and down from 14.1% in the third quarter of 2016 to reach the lowest level since the third quarter of 2007, according to ATTOM Data Solutions.
Distressed sales include bank-owned (REO) sales, third-party foreclosure auction sales and short sales.
“Distressed sales nationally are now the exception rather than the rule, and we would expect the distressed sale share to return to the pre-recession norm of single-digit percentages within the next year, given the current downward trajectory,” says Daren Blomquist, senior vice president at ATTOM Data Solutions.
He adds that distressed sales “have become more localized in nature, with some of the biggest increases from a year ago in markets experiencing regional economic weakness or a natural disaster event that has triggered a jump in foreclosure activity.”
As is typical, distressed sales decreased in certain areas of the country but increased in others.
About 20% of metro areas covered by ATTOM posted a year-over-year increase in the share of distressed sales in the third quarter, led by Corpus Christi, Texas (up 33%); Indianapolis, Ind. (up 30%); Cedar Rapids, Iowa (up 29%); Baton Rouge, La. (up 25%); Provo, Utah (up 22%); and Oklahoma City (up 22%).
Urban areas with the highest share of distressed sales in the third quarter included Atlantic City, N.J. (35.2%); McAllen-Edinburg, Texas (24.5%); Montgomery, Ala. (23.7%); Akron, Ohio (23.2%); and Youngstown, Ohio (22.5%).
Metros with the smallest share of distressed sales were San Jose, Calif. (3.1%); Salt Lake City (3.3%); Austin, Texas (4.1%); San Francisco (5.2%); and Provo-Orem, Utah (5.5%).
