ATTOM Data Solutions’ 2016 U.S. Home Sales Report found that 16.2 percent of single family home and condo sales in 2016 were distressed sales — bank-owned sales, short sales or foreclosure auctions sold to third-party buyers — the lowest level for such sales since 2007.
Distressed sales decreased from 18.8 percent of all sales a year earlier. Bank-owned (REO) sales accounted for 8percent of all sales in 2016, down from 10percent in 2015 and at its lowest level since 2006.
Short sales, homes that sold for less than the combined amount of loans secured by the property, accounted for 5.5 percent of all home sales in 2016, down from 6percent in 2015 and at the lowest level since 2008. Foreclosure auction sales (trustee’s sales or sheriff’s sales) selling to third-party investors (not including those going back to the foreclosing lender) comprised 2.8 percent of all home sales in 2016, down from 2.9 percent in 2015 and at its lowest level since 2007.
“The housing market hit several important milestones in 2016, with distressed sales at a nine-year low and home prices at a 10-year high, just barely below the pre-recession peak in 2006,” ATTOM Senior Vice President Daren Blomquist said in a press release. “This was all good news for home sellers, who realized their biggest average profits since purchase nationwide in 2016. Even distressed property sellers are benefitting from this hot seller’s market, with a record-high share of homes at foreclosure auction being purchased by third-party buyers rather than reverting back to the foreclosing bank.”
Third-party buyers at the foreclosure auction accounted for 28.5 percent of all completed auctions in 2016, up from 23.5 percent in 2015 to the highest level since 2000 — the earliest data is available. A total of 96,438 single family homes and condos were sold to third-party buyers at foreclosure auctions in 2016.
“The increased competition at the foreclosure auction is resulting in higher sales prices there, which can even result in surplus proceeds going to the distressed homeowner in some cases after other lien holders have been paid,” Blomquist said. “Our analysis of sales prices at completed foreclosure auctions in 2016 shows the smallest average loss from the property’s previous sale price since 2007, with 29 percent of properties nationwide selling for more than the previous sales price at the foreclosure auction. In a handful of markets such as Seattle, Los Angeles, Portland, San Francisco and San Diego, more than 50 percent of properties sold at foreclosure auctions in 2016 sold for more than their previous sale price.”
Homeowners who sold in 2016 realized an average home price gain since purchase of $38,206, which translated into an average 21 percent gain since purchase, up from an average 13 percent gain in 2015 to the highest level since 2007.
Nationwide, the median home sales price in 2016 was $218,175, up 6.8 percent from 2015, but still slightly below (0.4 percent) the pre-recession peak of $219,000 in 2006.