by Calculated Risk on 1/24/2011 09:00:00 AM

From Campbell/Inside Mortgage Finance HousingPulse: Distressed Property Index Surged in December

One of the biggest developments in December was a sharp jump in the HousingPulse Distressed Property Index or DPI ... Last month’s DPI was 47.2% and reflected the share of total home sale transactions that involved distressed properties. December’s level was up from 44.5% in November and nearly matched the 47.5% peak in the index reached in September ...

Distressed property sales were not distributed evenly around the country. In California, a state hit hard by the foreclosure crisis, an incredible 66% of all transactions tracked in December involved distressed properties. The combined area of Arizona and Nevada similarly suffered, with 62% of transactions being distressed. However, in the oil-producing states of Texas, Oklahoma, and Louisiana, only 29% of transactions were distressed.
...
Campbell Surveys predicts the surge in home buying may not last. “January and February are typically the slowest months of the year for home buying,” explained Popik. “And we’ll still have a backlog of foreclosed homes coming on the market during the winter, so prices may come under pressure, too.”

The NAR reported an increase in distressed sales in December too:

Distressed homes rose to a 36 percent market share in December from 33 percent in November, and 32 percent in December 2009.

There will probably be more distressed sales in a few months as banks resume foreclosures.