US residential property sales in May up 0.2% April, up less than 1% year-over-year to estimated annual pace of 5.1 million units; median home sales price up 6% from previous month, 13% from year-ago period to US$180,000: RealtyTrac
June 24, 2014
– Distressed Sales and Short Sales Down to 14.3 Percent of U.S Residential Sales; New Analysis Pinpoints Biggest Distressed Property Discounts Based on Foreclosure Status, Equity, Occupancy Status, Year Built Range and State
RealtyTrac® (www.realtytrac.com), the nation's leading source for comprehensive housing data, today released its May 2014 Residential & Foreclosure Sales Report, which shows that U.S. residential properties, including single family homes, condominiums and townhomes, sold at an estimated annual pace of 5,147,550 in May, virtually unchanged from April and an increase of less than 1 percent from May 2013.
The median sales price of U.S. residential properties -- including both distressed and non-distressed sales -- was $180,000, up 6 percent from the previous month and up 13 percent from a year ago. The year-over-year increase in May was the second consecutive month with a double-digit annual increase in U.S. home prices, and the biggest annual increase since U.S. home prices bottomed out in March 2012.
The median price of distressed sales -- properties in the foreclosure process or bank-owned -- was $120,000, 37 percent below the median price of non-distressed properties: $190,000. Distressed sales and short sales combined accounted for 14.3 percent of all U.S. residential sales in May, down from 15.6 percent of sales in April and down from 15.9 percent of all sales in May 2013.
"Distressed sales continue to represent a smaller share of the overall sales pie nationwide, helping to boost median home prices higher given that distressed sales tend to be in lower price ranges," said Daren Blomquist, vice president at RealtyTrac. "When broken down by average price range, U.S. sales are clearly shifting away from the lower end. Properties selling below $200,000 represented 50 percent of all sales in May, but that was down from a 55 percent share a year ago. Meanwhile, the share of homes selling above $200,000 increased from a 45 percent a year ago to a 50 percent in May 2014."
Home sales in higher price ranges represent growing share of market
Sales prices in every price range above $200,000 analyzed in the report increased as a share of total sales, both from the previous month and from a year ago, with the increase generally higher in the higher price ranges (see table below).
The share of home sales in the $200,000 to $300,000 price range increased 2 percent from the previous month and were up 6 percent from a year ago, but the share of home sales in all price ranges above $750,000 was up more than 20 percent from a year ago.
Meanwhile the share of home sales decreased from a year ago in all price ranges below $200,000, with bigger decreases corresponding to lower price ranges. The share of homes priced between $100,000 and $200,000 decreased 5 percent from a year ago, while the share of homes between $50,000 and $100,000 decreased 13 percent and the share of homes priced below $50,000 -- often highly distressed homes -- decreased 22 percent.
Home sales in the $100,000 to $200,000 price range accounted for one-third of all home sales in May -- the largest percentage of any price range -- but homes priced between $200,000 and $400,000 were close, accounting for nearly 32 percent of all sales for the month. Sales of homes priced in the $200,000 to $400,000 range were at their highest percentage of U.S. home sales since September 2008 -- a 68-month high.
Markets with highest annual home price appreciation
States with the biggest increases in median prices in May compared to a year ago were New York (up 28 percent), Ohio (up 19 percent), Michigan (up 18 percent), Illinois (up 17 percent), and Georgia (up 16 percent).
Some markets in these states and others are continuing to see home price appreciation accelerate compared to last year:
"Housing demand across Ohio is currently outpacing supply in many metro areas. As demand remains healthy, we are seeing home prices rise in many areas year over year, creating a return of equity and enabling homeowners to now consider placing their homes on the market to take advantage of low interest rates," said Michael Mahon, executive vice president/broker at HER Realtors, covering the Columbus, Cincinnati and Dayton, Ohio markets.
"While demand is high, concern still remains regarding the lack of available inventory particularly within the first time homebuyer segment of the market," Mahon continued. "Home sellers should consider now an optimal time to review their financial and housing goals with a real estate agent, and consider taking advantage of the higher prices they could potentially receive on selling their home in today's market."
Cooling markets for home price appreciation
Although home price appreciation accelerated on a national basis in May, it continued to cool in some markets with torrid increases in 2013:
"Inventory remains historically low, which is keeping home prices steady," said Wesley Hardin with RE/MAX Alliance, covering the Denver, Colo. market. "We are starting to see more transactions terminated than ever before because sellers want to make sure they are getting the best deal on their property."
Sales volume decreases annually in 23 states, 31 of 50 largest metro areas
The 1 percent increase in U.S. annualized sales in May from a year ago was the smallest increase in any month so far this year, and the 0.19 increase from the previous month marked the eighth consecutive month with flat or declining home sales on a month-over-month basis.
Annualized sales volume in May decreased from a year ago in 23 states and the District of Columbia, along 31 of the nation's 50 largest metropolitan statistical areas.
States with decreasing sales volume from a year ago included California (down 15 percent), Arizona (down 10 percent), Nevada (down 7 percent), Michigan (down 3 percent), and Florida (down 3 percent).
Major metro areas with decreasing sales volume from a year ago included Boston (down 23 percent), Fresno, Calif., (down 22 percent), Orlando (down 18 percent), Los Angeles (down 16 percent), and Phoenix (down 13 percent).
"Sales continue to be down year over year, but inventory levels are beginning to climb giving prospective homeowners more choices to buy within the Southern California market," said Chris Pollinger, senior vice president of sales at First Team Real Estate, covering the Southern California market.
Highest share of distressed sales in Las Vegas, Lakeland and Modesto
Short sales and distressed sales -- in foreclosure or bank-owned -- accounted for 14.3 percent of all sales in May, down from 15.6 percent in April and down from 15.9 percent of all sales in May 2013.
Metro areas with the highest share of combined short sales and distressed sales were Las Vegas (36.6 percent), Lakeland, Fla., (33.3 percent), Modesto, Calif., (31.9 percent), Jacksonville, Fla., (31.7 percent), and Riverside-San Bernardino-Ontario in Southern California (29.3 percent).
Short sales nationwide accounted for 4.5 percent of all sales in May, down from 5.4 percent in April and down from 5.8 percent in May 2013. Metros with the five highest percentages of short sales in May were all in Florida: Lakeland (17.7 percent), Orlando (14.9 percent), Tampa-St. Petersburg-Clearwater (13.4 percent), Palm Bay-Melbourne-Titusville (12.9 percent), and Sarasota (11.6 percent).
Sales of bank-owned (REO) properties nationwide accounted for 8.6 percent of all sales in May, down from 9.1 percent of all sales in April and down from 9.3 percent of all sales in May 2013. Metros with the highest percentage of REO sales in May were Modesto, Calif., (26.7 percent), Riverside-San Bernardino-Ontario (23.3 percent), Las Vegas (23.1 percent), Stockton, Calif., (21.5 percent), and Bakersfield, Calif. (19.7 percent).
Sales at the public foreclosure auction accounted for 1.2 percent of all sales nationwide in May, up from 1.1 percent of all sales in April and up from 0.8 percent of all sales in May 2013. Metros with the highest percentage of foreclosure auction sales in May included Orlando (3.8 percent), Tampa-St. Petersburg-Clearwater (3.8 percent), Miami (3.7 percent), Indianapolis (3.5 percent), and Lakeland, Fla., (3.4 percent).
Biggest distressed discounts on scheduled auctions, vacant with negative equity
As a supplement to the May U.S. Residential & Foreclosure Sales Report, RealtyTrac analyzed residential property sales transactions in the 12 months ending in March 2014 to pinpoint which types of distressed properties are selling at the biggest discounts based on foreclosure status, occupancy status, equity and year built range.
The analysis looked at 24 different distressed property profiles based on these four factors, comparing the sales price to the estimated full market value for each sale. The final discount was calculated by comparing the average discount (below market value) or premium (above market value) for each property profile to the control of properties not in foreclosure that sold during the same time period.
Based on this analysis, distressed properties with the biggest discount were those scheduled for public foreclosure auction that were vacant, had negative equity and were built between 1950 and 1990. Properties in this category sold for an average discount that was 28 percent below the control group of non-distressed sales.
Other distressed property profiles with discounts among the top five nationwide were the following:
Distressed properties selling at a premium
The analysis found that not all distressed properties sold at a big discount, and in some cases even sold at a premium above non-distressed properties. Bank-owned properties overall sold at a 3 percent premium, while bank-owned properties built in 1950 or before sold at a 7 percent premium.
Some sub-categories of bank-owned homes sold at a discount. Bank-owned properties that were confirmed vacant -- without the former homeowner or tenant still living there -- sold at an 18 percent discount below the non-distressed control, and bank-owned properties that sold after 1990 and between 1950 and 1990 also sold at slight discounts.
Properties with negative equity that were not in foreclosure or bank owned sold at a substantial premium of 19 percent above the control of all properties with no foreclosure status.
Best distressed discounts vary by state
The analysis also found the property profiles with the biggest discounts -- and the discounts available -- varied significantly by state. Below are the distressed property profiles with the biggest available discounts for select states.
The RealtyTrac U.S. Residential & Foreclosure Sales Report provides counts and median prices for sales of residential properties nationwide, by state and metropolitan statistical areas with a population of 500,000 or more. Data is also available at the county level upon request. The report also provides a breakdown of short sales, bank-owned sales and foreclosure auction sales to third parties. The data is derived from recorded sales deeds and loan data, which is used to determine cash sales and short sales. Sales counts for recent months are projected based on seasonality and expected number of sales records for those months that are not yet available from public record sources but will be in the future given historical patterns. Statistics for previous months are revised when each new monthly report is issued as more deed data becomes available for those previous months.
Residential property sales: sales of single family homes, condominiums/townhomes, and co-ops, not including multi-family properties.
Annualized sales: an annualized estimate of the number of residential property sales based on the actual number of sales deeds received for the month, accounting for expected sales records for that month that will be received in future months as well as seasonality.
Distressed sales: sale of a residential property that is actively in the foreclosure process or bank-owned when the sale is recorded.
Distressed discount: percentage difference between the median price of distressed sales and a non-distressed sales in a given geographic area.
Bank-Owned sales: sales of residential properties that have been foreclosed on and are owned by the foreclosing lender (bank).
Short sales: sales of residential properties where the sale price is below the combined total of outstanding mortgages secured by the property.
Foreclosure Auction sales: sale of a property at the public foreclosure auction to a third party buyer that is not the foreclosing lender.
The RealtyTrac U.S. Residential & Foreclosure Sales report is the result of a proprietary evaluation of information compiled by RealtyTrac; the report and any of the information in whole or in part can only be quoted, copied, published, re-published, distributed and/or re-distributed or used in any manner if the user specifically references RealtyTrac as the source for said report and/or any of the information set forth within the report.
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