Distressed Sales in U.S. Reverse Course in March, Uptick Again

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According to RealtyTrac's March and Q1 2014 Residential & Foreclosure Sales Report, U.S. residential properties, including single family homes, condominiums and townhomes, sold at an estimated annual pace of 5,253,464 in March, an increase of 0.4 percent from February and up 8 percent from a year ago.

The median sales price of U.S. residential properties -- including both distressed and non-distressed sales -- was $164,500 in March, up 1 percent from February and up 10 percent from March 2013. March was the 24th consecutive month where U.S. median home prices increased on an annual basis, and the 10 percent annual increase was the biggest annual percentage increase in that 24-month span.

"The housing market showed signs of coming out of hibernation in March after a sluggish fall and winter," said Daren Blomquist, vice president at RealtyTrac. "Median home prices increased on a monthly basis following six consecutive months where they were flat or declining, and increased on an annual basis by the biggest percentage since hitting bottom in March 2012.

"Sales volume also increased slightly from March to February following four consecutive monthly decreases, but both annual sales volume and median prices are still below their recent peaks in October and August respectively," Blomquist continued. "Meanwhile, the distressed share of sales increased from the fourth quarter to the first quarter nationwide and in 38 states, which -- along with many non-distressed homeowners regaining enough equity to list their homes for sale -- is helping to ease low inventory conditions in some markets."

Local broker perspectives

"We've noticed that inventory levels and home prices are climbing in the Southern California market as homebuyers and sellers re-awaken after a very long winter that affected housing markets throughout the nation," said Chris Pollinger, senior vice president of sales at First Team Real Estate, covering the Southern California market.

"The Ohio housing market has experienced a noticeable increase in showing activity and contracts, causing home prices to rise and increasing the amount of equity for homeowners throughout the state," said Michael Mahon, executive vice president and broker at HER Realtors, covering the Cincinnati, Columbus and Dayton, Ohio markets, all of which saw double-digit percentage increases in median home prices in March.  "As buyer demand has increased, so too has the number of multiple offer situations.  These multiple offer situations are causing buyers to purchase in cash instead of mortgage financing to increase their negotiation power."

"Home prices continue to appreciate in the Oklahoma market, which is a great sign for current homeowners in the market, but we are not seeing an increase in sales volume," said Sheldon Detrick, CEO of Prudential Detrick/Alliance Realty, covering the Oklahoma City and Tulsa, Okla. market.  "Housing inventory is still low, and we have not had a big increase in buyers because there has not been a surge in available listings."

"Demand continues to exceed supply of entry-level single family homes while our luxury markets continue to be active with strong buyer preference for newer properties," said Steve Roney, CEO of Prudential Utah Real Estate, covering the Salt Lake City and Park City markets in Northern Utah.

"Closed transactions in the Denver metro area were down by about 8 percent year over year in March 2014.  I believe this is a direct reflection of the historically low inventory levels we experienced in the Front Range during the first months of 2014," said Chad Ochsner, owner/broker of RE/MAX Alliance, covering the Denver market.  "Thankfully, we are seeing a big increase in the number of homes coming onto the market, which means spring is going to be very, very busy."

Investors and second home buyers account for 34 percent of all sales in March

In March, 34 percent of all U.S. residential property sales were to buyers with a different mailing address than the property address -- most likely investors or second home buyers.

Furthermore, 7 percent of all sales in March were multi-parcel transactions where multiple properties were sold on the same date and recorded on the same sales deed document. These multi-parcel transactions are likely not reported on any Multiple Listing Service (MLS).

Sales volume decreases annually in 6 states, 21 of 50 larges metro areas in March

Despite the annual increase in residential sales volume nationwide, sales volume in March decreased from a year ago in six states and 21 of the nation's 50 largest metro areas.

States with decreasing sales volume compared to a year ago were Massachusetts, Rhode Island, California, Connecticut, Nevada and Arizona. Major metros with decreasing sales volume from a year ago included San Jose (down 18 percent), San Francisco (down 15 percent), Los Angeles (down 14 percent), Rochester, N.Y., (down 14 percent), Sacramento (down 13 percent), San Diego (down 12 percent), Orlando (down 12 percent), Las Vegas (down 12 percent), Providence, R.I. (down 12 percent), Phoenix (down 11 percent), Riverside-San Bernardino, Calif., (down 11 percent), Hartford, Conn., (down 10 percent), and Boston (down 8 percent).

Home price appreciation cooling in some of the first markets to bounce back

Although annual home price appreciation accelerated nationwide in March, some of the markets with the biggest bounce back in home prices from the bottom of the market showed signs of slowing home price appreciation during the month.

• In San Francisco, where median home prices are up 94 percent from the bottom in March 2009, March 2014 home prices increased 26 percent from a year ago, down from a peak annual home price appreciation of 39 percent in June 2013.

• In Detroit, where median home prices are up 92 percent from the bottom in May 2009, March 2014 home prices increased 29 percent from a year ago, down from a peak annual home price appreciation of 38 percent in October 2013.

• In Cape Coral-Fort Myers, Fla., where median home prices are up 86 percent from the bottom in November 2010, March 2014 home prices increased 14 percent from a year ago, down from a peak annual home price appreciation of 30 percent in January 2013.

• In Phoenix, where median home prices are up 59 percent from the bottom in March 2011, March 2014 home prices increased 13 percent from a year ago, down from a peak annual home price appreciation of 30 percent in April 2013.

• In Atlanta, where median home prices are up 41 percent from the bottom in February 2012, March 2014 home prices increased 20 percent from a year ago, down from a peak annual home price appreciation of 27 percent in December 2013.

Distressed sales and short sales account for 16 percent of all sales in first quarter

Short sales and distressed sales -- in foreclosure or bank-owned -- accounted for 16.4 percent of all sales in the first quarter, up from 14.5 percent in the previous quarter but still down from 18.5 percent in the first quarter of 2013. Metro areas with the highest share of combined short sales and distressed sales were Las Vegas (41.6 percent), Stockton (34.8 percent), Detroit (34.2 percent), Cleveland (34.2 percent), and Dayton, Ohio (33.4 percent).

Short sales nationwide accounted for 5.6 percent of all sales in the first quarter, up from 5.2 percent of all sales in the fourth quarter but down from 7.0 percent of all sales in the first quarter of 2013. Metros with a high percentage of short sales in the first quarter included Orlando (16.6 percent), Tampa (14.6 percent), Las Vegas (14.1 percent), Miami (13.7 percent), Jacksonville, Fla., (13.7 percent), and Memphis (12.7 percent).

Sales of bank-owned properties nationwide accounted for 9.6 percent of all sales in the first quarter, up from 8.6 percent of all sales in the previous quarter but down from 10.6 percent of all sales in the first quarter of 2013. Metro areas with the highest percentage of bank-owned sales in the first quarter were Dayton, Ohio (27.1 percent), Akron, Ohio (25.2 percent), Modesto, Calif. (25.0 percent), Stockton, Calif. (24.6 percent), Cleveland (23.8 percent), Las Vegas (23.7 percent) and Detroit (22.3 percent.

Sales at the public foreclosure auction accounted for 1.2 percent of all sales nationwide in the first quarter, up from 0.7 percent in the fourth quarter and up from 0.9 percent in the first quarter of 2013. Metro areas with the highest percentage of auction sales in the first quarter were Lakeland, Fla., (5.4 percent), Miami (4.0 percent), Las Vegas (3.8 percent), Atlanta (3.5 percent) and Charlotte (3.4 percent).