A Decline In foreclosures and REO properties nationwide! Team Thayer #foreclosure #reo #realestate #market #housing #news #oregon
The lengthy, sustained nationwide decline in the number of foreclosures and REO properties nationwide in the last five and a half years has been largely responsible for a similar decline in the share of residential home sales that are all-cash transactions, according to data from CoreLogic released Thursday.
The share of home sales that were all cash dropped by 2.5 percentage points in February down to 35.7 percent and have averaged 35.6 percent over the first two months of 2016—the lowest share to start any year since 2008, immediately prior to the crisis.
By comparison, the cash sales share peaked at 46.6 percent in January 2011 and averaged about 25 percent prior to the crisis. CoreLogic estimates that at the rate of decline experienced in February 2016, the cash sales share should return to its “normal” pre-crisis level in the middle of 2018.
“Foreclosure completions have fallen substantially over the past few years across the nation. This has led to a drop in REO sales,” CoreLogic Chief Economist Frank Nothaft said recently. “Roughly one-half of REO homes are bought for all cash. Thus, the drop in REO has been an important reason for the national decline in the cash share of all sales.”
About 59.2 percent of all REO sales in February were all cash, giving REO the largest cash sales for the month, as historically has been the case. The category with the second-highest cash sales share was resales, with 35.6 percent, followed by short sales with 32.6 percent. Newly constructed homes had a cash sales share of 15.2 percent in February. Though the share of REO transactions that were all cash remained high, REO accounted for only 7.8 percent of all residential home sales in February—about one-third off of its peak of 23.9 percent from January 2011. Resales make up the largest share of total home sales (about 79 percent in February) and therefore have the largest impact on cash sales share.
The state with the highest cash sales share in February was Alabama, with 51.7 percent, followed by Florida with 49.2 percent. The metro area with the highest cash sales share in February was Philadelphia with 54.8 percent, followed by Detroit with 53.4 percent, according to CoreLogic.
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