According to the latest Realtors® Confidence Index survey, distressed real estate sales fell to 28 percent of the total market in October, down from 30 percent in September. In March 2009 distressed sales had reached 49 percent of total market sales. In October, foreclosures were reported as 17 percent of total sales, while short sales were 11 percent.
What does this mean for Realtors®? It appears that the overall percent of distressed property on the market has been in the 30 to 35 percent range in recent years. Currently the number is at the lower end of the range. Rising sales of distressed real estate relative to the total residential market in the past are believed to have had a significant negative impact on home prices. In recent months, the problem of distressed real estate sales has improved somewhat, which suggests that additional downward pressure on prices from the growth of distressed real estate sales is currently not occurring. Financial institutions are believed to be holding substantial inventories of distressed properties; however, the properties appear to be entering the sales markets at constant or slightly declining rates. Although distressed real estate sales are believed to have had a negative impact on the residential market, the impact does not appear to be worsening.