REALTORS® reported that sales of distressed properties continued to fall in 2016, according to the December 2016 REALTORS® Confidence Index Survey Report, a monthly survey of REALTORS® about their sales activity and local market conditions. Distressed sales accounted for seven percent of sales (eight percent in 2015). With rising home values, improved economic conditions, and fewer foreclosures, the share of sales of distressed properties has continued to decline since 2009 (36 percent).
Purchasing for investment has become less attractive with fewer distressed sales on the market and with home prices rising. In 2016, investment sales accounted for 14 percent of sales (14 percent in 2015). Purchases for investment purposes have generally been on the decline since 2011–2012 when investment sales accounted for 20 percent of sales.
As the shares of distressed and investment sales have declined, so has the share of cash sales. In 2016, cash sales accounted for 23 percent of sales (24 percent in 2015). Buyers of homes for investment purposes, distressed sales, second homes, and foreign clients are more likely to pay cash than first-time homebuyers.
The author acknowledges Danielle Hale, Managing Director, Housing Research; Meredith Dunn, Research Communications Manager; and Amanda Riggs, Research Survey Analyst for their comments. Any errors are attributable to the author.
Source: NAR Economic Outlook