January 27, 2011 (Shirley Allen)
According to the latest Campbell/Inside Mortgage Finance survey, nearly half of the homes sold in December were distressed properties. The firm’s HousingPulse survey reveals distressed property sales surged to 47.2% of the market in December, up from 44.5% in November and nearly matching the 47.5% peak reached in September.
The last time sales of distressed properties hit similar highs were in September, just before robo-signing allegations came to light as large mortgage servicers suspended foreclosure proceedings to investigate reports of improprieties in foreclosure paperwork.
Distressed property sales now makeup a large portion of several state’s housing market. The state with the dubious position of having the largest share was the Golden State, California as almost two-thirds of all residential property transactions tracked in December involved distressed properties. In Arizona and Nevada, 62% of transactions concerned distressed properties.
The states with the smallest share of distressed property sales were Texas, Oklahoma, and Louisiana with only 29 percent of all properties distressed.
The survey also revealed that sales to first-time homebuyers continued at the high level of 37.7% of all transactions tracked in December, a strong increase from the 34.4% in September and October. It is believed that fear of mortgage rate hikes prompted the demand.
The report said investors shied away from buying due to concerns home prices would further decline.
Tags: finance survey, distressed properties, mortgage servicers, housing market, first-time homebuyers, mortgage rates, investors, home prices