Distressed sales trending higher, put downward pressure on price appreciation


March’s average gains for sellers in Washington and Sullivan counties garnered a lot of attention because they exceeded the national average. That’s good news for those who sold that month. But it’s only one month – not a trend. In fact, the average sales price of homes across the region is trending in the range of 2% to 4%.

It’s almost like there’s a ceiling the average price can’t break through at a time when sales are going gangbusters.

One reason is distressed sales. Their numbers have increased, and there’s more coming down the pipeline that should hit the market later this year. Distressed sales are a price factor because they are sold at substantial discounts from market prices, so they’re an anchor on the price non-stressed sales command.

Two sources help track this cap on prices.

RealtyTrac’s Foreclosure Filing and Home Sales reports: Here’s what those reports tell about Q1 sales and findings and their trend position.

SULLIVAN COUNTY 

2 up 75Distressed and short sales increased from their Q4 levels but were below what they were Q1 last year.  REO – banked owned – sales were at 12.4% compared to 18.8% last year.
In foreclosure sales are flat as were short sales.

New Q1 filings tell a different story. REO filings were 170 compared to 37 last year. Notice of Trustee Sales increased from 55 to 62.

WASHINGTON COUNTY 

2 up 75There was little change in the most recent distressed and short sales. REO sales sat at 8.2%, up from 7.3% in Q4 but basically unchanged from last year’s 8.9%.

In-foreclosure sales accounted for less than a point of total sales while short sales increased to 5.4% from 4.4% last year.

New REO filings increased to 51 from 29 last year while notice of trustee sales were flat, 42 during the first three months of this year compared to 47 last year.

CARTER COUNTY

3 side 75Distressed and Short Sales increased to 14.8% this year from 12.8% last year.

REO sales were at 9.2%, up from 8.8% last year while short sales were 4.9%, up from 3.2% last year.

New REO filings were flat 12, compared to 10 last year.

Notice of Trustee sales increased to 17 from 15 Q1 last year.

GREENE COUNTY 

2 up 75Distressed and short sales increased to 21.3% from 13.7% last year.

REOs were 13.8% up from 11.6% while short sales increased to 7.1% from 2.1%.

New REO filings jumped to 40 from 19 last year, and notice of trustee sales filings were 35 in Q1, up from 26 last year.

HAWKINS COUNTY 

2 up 75Distressed and short sales were down this year 21.4% compared to 13.7% last year.

REO sales were 12.9%, down from 16.2%. Short sales declined to 7.6% from 4.6%.

New REO filings were 34, up from 13 last year while notice of trustee sales were flat – 25 compared to 29 last year.

UNICOI COUNTY

3 side 75Distressed and short sales increased to 17.9% from 10% last year.

REO sales were 12.5%, up from 8% while short sales were 3.6 compared to 0% last year.

New REO filings in Q1 were 5 this year compared to none during Q1 last year. Notice of trustee sales dropped from 9 last year to 4 this year.

A big reason for the increase in new filings is the market’s improvement.

“Home sellers in many markets are now seeing average price gains close to or above what home sellers experienced during the last housing boom,” said Daren Blomquist, senior vice president at RealtyTrac. “That should encourage more homeowners to take advantage of the prime seller’s market and list their homes for sale this year. Banks are already taking advantage of that market as evidenced by the uptick in the distressed sales share over the last two quarters.

“Given that bank-owned homes are selling at a median price that is 40 percent below the overall median sales price nationwide, the uptick in distressed sales combined with affordability constraints are contributing to faltering home price appreciation in some markets” Blomquist added.

Here in Northeast Tennessee home sales moved past pre-recession levels May last year and have stayed there every month since then. That sales pace have whittled away much of the larger than normal inventory because new listings have not increased proportionally to sales gains. According to reports on the Northeast Tennessee Association Web Page’s Market Pulse section, that put March’s inventory at a 9-month supply compared to 12.3 months March last year.  That inventory number describes the number of months it would take to exhaust active listing at that month’s current sales rate.

Bottom line – while there will surely be some impressive monthly gains for some sellers and bargains from some buyers the overall price trend for the region looks at more of the same performance in the 2 to 4% annual range.

 

 

 

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: