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Home Price Appreciation Slows in 65 Percent of U.S. Housing Markets in July Compared to a Year Ago

Distressed Sales and Short Sales Down to 13.6 Percent of All Sales; U.S. Home Sales Volume Down From Year Ago for Third Straight Month

IRVINE, CA -- (Marketwired) -- 08/28/14 -- RealtyTrac® (www.realtytrac.com), the nation's leading source for comprehensive housing data, today released its July 2014 U.S Residential & Foreclosure Sales Report, which shows that U.S. residential properties, including single family homes, condominiums and townhomes, sold at an estimated annual pace of 4,634,513 in July, down 3 percent from the previous month and down 12 percent from a year ago -- the third consecutive month where annualized sales volume has decreased on a year-over-year basis.

The median price of U.S. residential properties sold in July -- including both distressed and non-distressed sales -- was $191,000, up 3 percent from the previous month, and up 12 percent from a year ago to the highest level since September 2008, a 70-month high.

"As distressed sales continue to decline, the share of sales is tilting toward more expensive homes, boosting the nationwide median sales price," said Daren Blomquist, vice president of RealtyTrac. "The nationwide home price increase, however, masks slowing home price appreciation in the majority of housing markets across the country. This slowing appreciation was expected and provides another sign that the real estate recovery thus far is behaving rationally. Still, the housing market is entering a dicey transition phase where it is becoming much more reliant on first-time homebuyers and move-up buyers to sustain the recovery as investor involvement wanes."

Other high-level findings:

  • Properties selling in the $200,000-and-below price range accounted for 49 percent of all sales in July, down from 52 percent of all sales a year ago, while properties selling above $200,000 accounted for 51 percent of all sales in July, up from 48 percent of all sales a year ago.

  • States with the biggest annual increase in median sales prices were Michigan (24 percent increase), Ohio (20 percent increase), Virginia (20 percent increase), Minnesota (14 percent increase), and New York (13 percent increase).

  • Metros with the biggest annual increase in median sales price included Detroit (up 33 percent), Dayton, Ohio (up 31 percent), Stockton, Calif., (up 24 percent), Modesto, Calif., (up 22 percent), Cleveland (up 20 percent), and Miami (up 19 percent).

  • Among 183 metropolitan statistical areas with a population of 200,000 or more and with sufficient sales data, 119 (65 percent) saw lower annual home price appreciation in July 2014 compared to July 2013.

  • Markets where annual home price appreciation in July 2014 dropped to single digits from double digits a year ago included San Francisco, San Diego, Los Angeles, Chicago, Portland, Denver and Phoenix.

  • Out of the 183 major markets, 18 (10 percent) reached new median home price peaks in the last two months, including Denver, San Jose, Calif., Columbus, Ohio, Charlotte, N.C., Austin, Texas, Nashville, Tenn., and Oklahoma City.

  • The median price of U.S. distressed sales -- properties in the foreclosure process or bank-owned -- was $128,000 in July, up 3 percent from the previous month and up 11 percent from a year ago, but still 37 percent below the median price of non-distressed sales: $204,000.

Local broker insights
"Coastal areas in Southern California that were first to rebound from the distressed-heavy market last year are slowing to more long-term sustainable growth," said Chris Pollinger, senior vice president of sales at First Team Real Estate, covering the Southern California market. "Other areas have finally worked through their distressed inventory and are seeing significant price increases while the pent up demand for new inventory by inventors, flippers and prospective home buyers is prevalent."

"The Seattle housing market continues to perform strongly thanks in large part to the health of our local economy, while our biggest challenge is the supply of homes available to buyers," said OB Jacobi, president of Windermere Real Estate, covering the Seattle market. "In Seattle we currently have about one month's supply of inventory compared to a healthy market that should have four to six months. The result is a highly charged, highly competitive housing market where many homes are drawing multiple offers and selling for well above list price.

"At the same time, the double-digit price increases we saw in months past have slowed somewhat, which is actually a good thing because as history has taught us, this kind of sustained appreciation can lead to boom and bust cycles that none of us want to relive," Jacobi added.

"The Denver housing market experienced its typical end-of-summer lull, however, homes under $300,000 are still moving rapidly, many with multiple offers," said Phil Shell, managing broker at RE/MAX Alliance, covering the Denver market. "The overall market is not as frantic as it was during spring of this year but it is still brisk, and pricing is becoming more important when listing a property as the overpriced inventory is sitting for longer periods of time."

California and Florida markets post highest distressed sale share
Short sales and distressed sales -- in foreclosure or bank-owned -- accounted for 13.6 percent of all single family and condo sales in July, up from 12.8 percent in June but down from 15.0 percent in July 2013.

Markets with the highest share of distressed sales and short sales combined were Las Vegas (40.3 percent), Stockton, Calif., (39.9 percent), Modesto, Calif. (33.4 percent), Lakeland, Fla., (30.6 percent), and Cape Coral-Fort Myers, Fla., (27.9 percent).

Markets bucking the national trend with a year-over-year increase in share of distressed sales and short sales combined included New Haven, Conn., Louisville, Ky., Boston, Youngstown, Ohio and Des Moines, Iowa.

Short sales increase from previous month but still down from year ago
Short sales accounted for 4.5 percent of all single family and condo sales in July, up from 3.5 percent in the previous month but down from 5.2 percent a year ago.

Markets with the highest share of short sales in July were Lakeland, Fla., (14.3 percent), Orlando, Fla., (13.7 percent), Las Vegas (13.1 percent), Tampa (12.5 percent), Cape Coral-Fort Myers, Fla., (12.3 percent).

Markets bucking the national trend with a year-over-year increase in share of short sales included Little Rock, Ark., Albany, N.Y., Chicago, Virginia Beach, Va., and Cleveland.

Oklahoma City, Des Moines, San Diego, Boston see increasing REO sales share
Bank-owned (REO) sales accounted for 8.0 percent of all single family and condo sales in July, down from 8.1 percent in the previous month and down from 9.1 percent a year ago to the lowest level since January 2011.

Markets with the highest share of bank-owned sales in July were Stockton, Calif., (30.3 percent), Modesto, Calif., (25.3 percent), Las Vegas (24.7 percent), Bakersfield, Calif., (20.0 percent), and Riverside-San Bernardino, Calif., (19.4 percent).

Markets bucking the national trend with a year-over-year increase in share of REO sales included New Haven, Conn., Des Moines, Oklahoma City, Louisville, Ky., Boston, Stockton, Calif., San Jose, Calif., and San Diego.

Miami, Orlando, Atlanta among markets with highest share of foreclosure auctions
Sales at the foreclosure auction accounted for 1.2 percent of all single family and condo sales in July, up from 1.1 percent in June and up from 0.8 percent in July 2013.

Markets with the highest share of auction sales in July were Miami (4.6 percent), Lakeland, Fla., (4.3 percent), Orlando, Fla., (3.8 percent), Lancaster, Pa., (3.4 percent), and Atlanta (3.2 percent).

Markets bucking the national trend with a year-over-year decrease in share of auction sales included Sacramento, Calif., Portland, Ore., Tucson, Ariz., Bakersfield, Calif., and Seattle.

Report methodology
The RealtyTrac U.S. Residential & Foreclosure Sales Report provides counts and median prices for sales of residential properties nationwide, by state and metropolitan statistical areas with a population of 500,000 or more. Data is also available at the county level upon request. The report also provides a breakdown of short sales, bank-owned sales and foreclosure auction sales to third parties. The data is derived from recorded sales deeds and loan data, which is used to determine cash sales and short sales. Sales counts for recent months are projected based on seasonality and expected number of sales records for those months that are not yet available from public record sources but will be in the future given historical patterns. Statistics for previous months are revised when each new monthly report is issued as more deed data becomes available for those previous months.

Residential property sales: sales of single family homes, condominiums/townhomes, and co-ops, not including multi-family properties.

Annualized sales: an annualized estimate of the number of residential property sales based on the actual number of sales deeds received for the month, accounting for expected sales records for that month that will be received in future months as well as seasonality.

Distressed sales: sale of a residential property that is actively in the foreclosure process or bank-owned when the sale is recorded.

Distressed discount: percentage difference between the median price of distressed sales and a non-distressed sales in a given geographic area.

Bank-Owned sales: sales of residential properties that have been foreclosed on and are owned by the foreclosing lender (bank).

Short sales: sales of residential properties where the sale price is below the combined total of outstanding mortgages secured by the property.

Foreclosure Auction sales: sale of a property at the public foreclosure auction to a third party buyer that is not the foreclosing lender.

Report License
The RealtyTrac U.S. Residential & Foreclosure Sales report is the result of a proprietary evaluation of information compiled by RealtyTrac; the report and any of the information in whole or in part can only be quoted, copied, published, re-published, distributed and/or re-distributed or used in any manner if the user specifically references RealtyTrac as the source for said report and/or any of the information set forth within the report.

Data Licensing and Custom Report Order
Investors, businesses and government institutions can contact RealtyTrac to license bulk foreclosure and neighborhood data or purchase customized reports. For more information contact our Data Licensing Department at 800.462.5193 or [email protected].

About RealtyTrac
RealtyTrac is a leading supplier of U.S. real estate data, with nationwide parcel-level records for more than 129 million U.S. parcels that include property characteristics, tax assessor data, sales and mortgage deed records, Automated Valuation Models (AVMs) and 20 million active and historical default, foreclosure auction and bank-owned properties. RealtyTrac's housing data and foreclosure reports are relied on by many federal government agencies, numerous state housing and banking departments, investment funds as well as millions of real estate professionals and consumers, to help evaluate housing trends and make informed decisions about real estate.

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