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Distress Sales Plummet in MRIS Territory

This post just in from the Virginia Association of REALTORS, Submitted by Andrew Kantor on May 11, 2012 – 8:32am

We’ve now got MRIS’s April numbers for foreclosures and short sales. Short sales are slightly up, but foreclosures are waaaay down.

Short sales: 12.2% of the market, up about 3% from last April
Foreclosure sales: 11.0% of the market, down 47% from last April
Total distressed sales: 23.2% of the market, down 29% from last AprilNegative Equity By State 2011

Granted, having a market where almost a quarter of the sales are distressed isn’t a Good Thing, but there’s a sense to it. People bought near the top of the bubble and have to sell (for whatever reason — job, life change, etc.). So they either take the hit or work out a short sale with their lenders.

That means that short sales are going to continue to be a noticeable part of the market for as long as lots of folks own homes bought between, say, 2004 and 2007. If they have to sell, they’ll have to sell at a lower price, ’cause it’s gonna be a while before prices are back up to those unnatural highs.

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Comments from Vicky Chrisner:  This is great news and evidence of the continuing market recovery.  From a personal standpoint, within my service areas I am seeing 20% or less of the market is distress sales (foreclosures+short sales).  In 2008, I mostly worked REOs (foreclosures); in 2009 it was a mix of REOs and short sales; in 2011 my business was about 1/3 traditional resales, 1/3 distress sales and 1/3 new construction.  So far, in 2012, I have worked mostly with traditional resales and new construction and am pleased to report that I am even doing a lot of land sales again…. I estimate the percentage of distress sales is about 15-20% of my business so far; which seems very much in line with the submarkets where I work.

-Footnote: The chart included in this post is from 2011, and shows most of the DC Metro area as “Yellow” meaning 21-30% of homeowners were “underwater”.  This percentage is probably down somewhat now, but is roughly in line with the MRIS numbers, and my own observations of the market place.

-Footnote:  MRIS is the Metropolitan Regional Information System~ It is the multiple listing service for the Washington DC Metro area which includes Northern Virginia, Washington DC and most of Maryland.

One Response to “Distress Sales Plummet in MRIS Territory”

  1. May 19, 2012 at 2:41 am, Shadow Inventory? Fact or Fiction? | Leesburg Real Estate and Homes said:

    […] consider that MRIS just reported that the number of distress sales (this is short sales + foreclosures) are plumme…; and check out this chart created from the raw MLS data showing the last 5 years worth of sales in […]

    Reply

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