Out of the total volume of home sales in June 2016, 7.8% were real estate-owned sales and short sales, also known as distressed sales. This share is down 2.2% year-over-year from June 2015, and 0.8% month-over-month from May 2016.
REO sales accounted for 4.9% of the total sales volume – down 1.9% from the June 2015 share, and the lowest REO sales share since September 2007. Short sales accounted for 2.9% of all sales.
At their peak in January 2009, distressed sales made up 32.4% of all sales. While distressed sales play an important role in clearing the housing market of foreclosed properties, they sell at a discount to non-distressed sales, and when the share of distressed sales is high, it can pull down the prices of non-distressed sales… If the current year-over-year decrease in the distressed sales share continues, it will reach that “normal” 2-percent mark in mid-2019.
Distressed sales increased in only eight states in June. Maryland has the highest distressed sales share, at 19.4%. North Dakota has the smallest, at 2.5%. Only North Dakota and the District of Columbia are close to pre-crisis distressed sale share levels.