The city of Riverside had the nation’s highest percentage of distressed home sales in January, surpassing even Las Vegas and underscoring the deep difficulties facing the Inland Empire’s housing market this year, according to a report released Thursday.
The report by the Santa Ana research firm FirstAmerican CoreLogic factors in the number of short sales (in which a lender agrees to sell a property for a value that is less than the outstanding mortgage) with the number of foreclosure properties sold by lenders.
Banks and other lenders are increasingly turning to short sales as a way of dealing with defaulting borrowers, as these kinds of transactions tend to save lenders money over foreclosures, though they still make up a small share of the market. The average price for a foreclosed property sold in January was $141,900, compared with $215,300 for a home sold through a short sale, according to the report.
Out of the nation’s largest 25 housing markets, Riverside topped the list with 62% of the homes sold in January being either foreclosure sales or short sales. Las Vegas was second at 59%, and Sacramento third at 58%.
Nationwide, short sales accounted for 8% of all sales in January, up from 7% in December and 5% in January 2009. During the 12 months ended in January, there were 974,000 distressed sales: 740,000 were foreclosure sales and 234,000 were short sales.
San Diego’s short-sale share was 19% in January, making it the highest-ranked short-sale market, followed by Sacramento with 18% and Oakland at 16%.
Distressed sales in January were at their highest level since April 2009, accounting for 29% of all U.S. sales in January, according to the report. Distressed sales hit their peak in January 2009, when they accounted for 32% of all sales nationally, then fell through the summer but began to rise again through the second half of 2009.
— Alejandro Lazo