by Calculated Risk on 8/13/2012 04:31:00 PM

I've been following the Sacramento market to look for changes in the mix of house sales in a distressed area over time (conventional, REOs, and short sales). The Sacramento Association of REALTORS® started breaking out REOs in May 2008, and short sales in June 2009.

So far there has been a shift from REO to short sales, and the percentage of distressed sales has been declining year-over-year. This data would suggest some improvement although there are still more distressed sales to come.

In July 2012, 54.4% of all resales (single family homes and condos) were distressed sales. This was up slightly from 54.2% last month, and down from 61.3% in July 2011. The percentage of REOs fell to 22.4%, the lowest since the Sacramento Realtors started tracking the data and the percentage of short sales increased to 32.0%, the highest percentage recorded.

Here are the statistics.

Click on graph for larger image.

This graph shows the percent of REO sales, short sales and conventional sales. There is a seasonal pattern for conventional sales (stronger in the spring and summer), and distressed sales happen all year - so the percentage of distressed sales decreases every summer and the increases in the fall and winter.

There has been an increase in conventional sales this year, and there were more short sales than REO sales in July for the fourth consecutive month. And the gap between short sales and REO sales is increasing.

Total sales were up 4.7% compared to June 2011, and conventional sales were up 23% year-over-year. Active Listing Inventory for single family homes declined 64.2% from last July and listings were down another 6.9% in July (from June).

Cash buyers accounted for 31.1% of all sales (frequently investors), and median prices were up 0.6% from last July.

This seems to be moving in the right direction, although the market is still in distress.

We are seeing a similar pattern in other distressed areas to more conventional sales, and a shift from REO to short sales,.