The distressed housing market has declined dramatically. With improved home prices over the past five years the number of distressed properties in California and the Sacramento area is much less than it was during height of the recession.
According the California Association of Realtors (C.A.R.) in January 2009, almost 70 percent of all homes sold in the state were distressed. This includes bank owned properties and short sales. As of January 2014 the percentage of distressed properties sold declined to under 16 percent of all sales. C.A.R. further reports back in January 2009, the bank owned properties and short sales made up approximately 60 and 10 percent of the total sales.
“At the time, short sales were rising and peaked in January 2012 when they accounted for 25.6 percent of all sales.”
During the height of the recession I was working on up to 25 short sale listings at one time. As of today, we do not have a single short sale listing although they accounted for 9.2 percent of all sales in January of this year.
I don’t have specific numbers for the Sacramento area but with our area being particularly hard hit by the housing price correction and recession, I am sure the percentage of distressed property sales exceed the state averages and may still account for more than 16 percent reported on statewide basis for January of this year. With housing so strong in the early 2000’s builders were putting up homes very fast, lenders were scrambling to make loans and unfortunately many people who were able to get financing were not financially strong enough to withstand a shock. When a new homebuyer who depended on two incomes lost one or had a significant reduction they were unable to make payments and with prices plummeting had no borrowing power. This was a common recipe for short sales and foreclosures.
The good news is during the same period, January 2009 to January 2014, California’s median home price has increased more than 64 percent from $249,960 in January 2009 to $410,990 in January 2014. In Sacramento County sales prices have appreciated 56.2% over the last 5 years. The average listing price for Sacramento homes for sale on Trulia was $309,598 for the week ending Mar 19 and according to Zillow the median home value in Sacramento is $235,100 which is up 22.9% over the past year. Zillow is now predicting they will rise 7.5% within the next year.
