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LATEST CORELOGIC ECON TWEETS

Cash and Distressed Sales Update: January 2017

The Cash Sales Share for January Was 37 Percent

Molly Boesel    |    Housing Trends

  • The cash sales share for January 2017 was 36.5 percent, unchanged from a year ago
  • The distressed sales share for January 2017 was 7 percent, down 4.6 percentage points from  January 2016
  • Only two states and the District of Columbia have distressed sales shares close to their pre-crisis levels

Cash sales accounted for 36.5 percent of total home sales in January 2017, unchanged from January 2016. 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.

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 January 2017 at 61.2 percent, followed by resales at 36.5 percent and newly constructed homes at 17.7 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 5.9 percent and short sales made up 1.1 percent in January 2017. The distressed sales share of 7 percent in January 2017 was 4.6 percentage points below the January 2016 share, and was the lowest distressed sales share for any month since September 2007. At its peak in January 2009, distressed sales totaled 32.3 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 early-2018.

All but eight states recorded lower distressed sales shares in January 2017 compared with a year earlier. Connecticut had the largest share of distressed sales of any state at 17.3 percent[1] in January 2017, followed by Maryland (16.3 percent), Michigan (15.1 percent), New Jersey (15.1 percent) and Illinois (12.8 percent). North Dakota had the smallest distressed sales share at 1.2 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).

Cash Sales

Cash Sales

Figure 3 shows the cash sales share by state[2] for January 2017. Alabama had the largest cash sales share of any state at 52 percent, followed by New York (49.7 percent), Florida (48.3 percent), Indiana (46 percent) and Missouri (45.4 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.