REO Sales - Highest Share in the Nation
Where do REOs take the largest piece of the home sales pie? According to data compiled by the independent real estate research and analytical firm Hanley Wood Market Intelligence, itâ€™s Modesto, California.
In this Northern California city that describes itself as the heart of the agriculturally rich San Joaquin Valley, Hanley Wood found that 60.5 % of total home sales closings during the third quarter of this year were for bank-owned properties. By comparison, the company says the national average is 28 %.
Modestoâ€™s official city Web site boasts that homeownership opportunities abound there, with a median home price of $131,000, substantially lower than the state median, which the California Association of Realtors reports was $304,220 in October.
In a Housing Intelligence blog posting by two of Hanley Woodâ€™s analysts, aptly titled â€œBanktowns,â€ they note that a few years ago, suggesting that REOs could comprise the majority of all home sales transactions was unheard of, but several years of a depressed housing market and millions of foreclosures have made the scenario a reality for eight metropolitan statistical areas (MSAs).
Las Vegas and Flint, Michigan, both with 59.8 % of their third-quarter transactions involving foreclosed homes.
The other five MSAs where more than half of the sales last quarter were REOs include: Detroit, Michigan - 56.6 %; Phoenix, Arizona - 53.9 %, California â€“ 53%, Florida - 51.5 %.
If there is a silver lining at least it means these distressed properties are moving their way through the system and back into the market.