The Charlotte area continues to see a decline in sales of distressed properties, according to real estate analytics firm CoreLogic. The share of all sold properties that were bought in short sales or reverted to lender ownership following foreclosure in the Charlotte-Concord-Gastonia market has dropped nearly two percentage points over the last year.
According to CoreLogic, distressed sales in the Charlotte metropolitan statistical area made up 7.3 percent of total home sales in June, down from 9.1 percent in the same month last year. REO sales made up 3.2 percent of the total, while short sales amounted to 4.1 percent. A year ago, those figures were at 4.3 percent and 4.8 percent, respectively. Local figures are lower than the national average.
Across the country, distressed sales constituted 9.4 percent of total sales, down from 11.8 percent in June 2014. The latest results were the lowest seen for the month of June since 2007, when distressed sales made up 4.9 percent of all sales.
In June 2015, REOs accounted for 6 percent of distressed sales, while short sales made up the remaining 3.4 percent. The REO sales share was at its lowest since September 2007, when it was 5.2 percent, CoreLogic reports.
A short sale is defined as a real estate sale in which the lender and borrower agree to sell the property for less than the amount due on the loan. It’s a way for the borrower to avoid a default on his credit report, while the lender avoids foreclosure fees. REO sales occur when the property reverts back to the lender, usually a bank or government agency, after an unsuccessful foreclosure auction.
At its peak in January 2009, distressed sales totaled 32.3 percent of all sales nationally, with REO sales representing 27.9 percent of that share. CoreLogic says the ongoing decline in REO sales is helping boost home sale prices as bank-owned properties typically sell at a larger discount than short sales. According to CoreLogic, the pre-crisis share of distressed sales was traditionally about 2 percent. If the current year-over-year decrease in distressed sales share continues, the sales share would reach that “normal” 2-percent mark in mid-2018.
Florida had the largest share of distressed sales of any state at 21 percent in June 2015, followed by Michigan at 20.7 percent; Maryland at 20.5 percent; Connecticut at 19.3 percent; and Illinois at 19.1 percent. Nevada had a 6.8 percentage point drop in its distressed-sales share from a year earlier, the largest decline of any state.
North Carolina had an 8.1 percent distressed-sale share in June, down from nearly 10.1 percent a year ago. REOs accounted for 3.4 percent of the share this year, with short sales comprising 4.6 percent.
California had the largest improvement of any state from its peak distressed-sales share, falling 58.3 percentage points from its January 2009 peak of 67.4 percent.
CoreLogic, based in Irvine, Calif., provides property information, analytics and data services.