Distressed Sales Slid to Six Percent of Residential Sales in March 2017

With rising home values, improved economic conditions, and fewer foreclosures, the share of sales of distressed properties has generally continued to decline. Distressed sales accounted for six percent of sales in March 2017 (seven percent in February 2017; eight percent in March 2016), based on the March 2017 REALTORS^® Confidence Index Survey Report. Foreclosed properties were five percent of residential sales, while short sales were only one percent of residential sales[1]. Distressed sales accounted for about a third to half of sales until 2012 when they began to fall below this level.

Purchasing for investment has become less attractive with fewer distressed sales on the market and with home prices rising, but a seasonal pick-up in the share of investment purchases can often be seen from November to March. Investment sales made up 15 percent of sales in March 2017 (17 percent in February 2017; 14 percent in March 2016).[2] Purchases for investment purposes have generally been on the decline since 2011–2012 when investment sales accounted for 20 percent of sales.

With fewer sales of distressed properties and sales of properties for investment use, the share of sales that are all-cash has also been on trending downwards. In March 2017, 23 percent of sales were cash sales (27 percent in February 2017; 25 percent in March 2016). Buyers of homes for investment purposes, distressed sales, second homes, and foreign clients are more likely to pay cash than first-time home buyers. As the shares of investment and distressed sales have declined, so has the share of cash sales.