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LATEST CORELOGIC ECON TWEETS

Cash and Distressed Sales Update: December 2016

The Cash Sales Share for 2016 Was 32.1 Percent, the Lowest Full-Year Cash Sales Share Since 2007

Molly Boesel    |    Housing Trends

  • The full-year cash sales share for 2016 was 32.1 percent
  • The cash sales share in December 2016 was 33.1 percent
  • The full-year distressed sales share for 2016 was 8.9 percent

Cash sales accounted for 33.1 percent of total home sales in December 2016, down 1.3 percentage points year over year from December 2015. For the full-year 2016, the cash sales share was 32.1 percent, 2.2 percentage points below the full-year 2015 share, and the lowest annual cash sales share since 2007 when it was 27 percent. The cash sales share peaked in January 2011 when cash transactions accounted for 46.6 percent of total home sales nationally. Prior to the housing crisis, the cash sales share of total home sales averaged approximately 25 percent. If the cash sales share continues to fall at the same rate it did in December 2016, the share should hit 25 percent by mid-2019.

Figure 1 shows the historical trend in the cash sales share by sale type. Real-estate owned (REO) sales had the largest cash sales share in December 2016 at 61.1 percent. Short sales had the next highest cash sales share at 34.2 percent, followed by resales at 33 percent and newly constructed homes at 16.7 percent. While the percentage of REO sales within the all-cash category remained high, REO transactions have declined since peaking in January 2011.

Cash Sales

Cash Sales

Figure 2 shows the distressed sales share of total home sales, of which REO sales made up 5.8 percent and short sales made up 2 percent in December 2016. The distressed sales share of 7.8 percent in December 2016 was the lowest distressed sales share for any month since October 2007. The distressed sales share for the full-year 2016 was 8.9 percent, down 2.1 percentage points from the full-year 2015 and the lowest annual distressed sales share since 2007 when it was 6 percent. At its peak in January 2009, distressed sales totaled 32.4 percent of all sales with REO sales representing 27.9 percent of that share. The pre-crisis share of distressed sales was traditionally about 2 percent. If the current year-over-year decrease in the distressed sales share continues, it will reach that “normal” 2-percent mark by mid-2018.

 What Title of figure 2 is

Cash Sales

All but nine states recorded lower distressed sales shares in December 2016 compared with a year earlier. Maryland had the largest share of distressed sales of any state at 17.9 percent[1] in December 2016, followed by Connecticut (17.6 percent), Michigan (15.8 percent), New Jersey (15.5 percent) and Illinois (13.6 percent). North Dakota had the smallest distressed sales share at 1.3 percent. While some states stand out as having high distressed sales shares, only North Dakota, Utah and the District of Columbia are close to their pre-crisis levels (each within one percentage point).

Figure 3 shows the cash sales share by state[2] for December 2016. New York had the largest cash sales share of any state at 47.9 percent, followed by New Jersey (47.6 percent), Alabama (46.1 percent), Michigan (44.3 percent) and Florida (42.1 percent).



1 The distressed sales share for states was calculated using sales from the past 12 months.

2 Adequate data was not available for South Dakota, Vermont and West Virginia, and as such, cash sales shares are not reported for these states.

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