The extinction of the “Distressed Seller”….
Several years ago it was common to see streets littered with bank-owned homes and short sales. Reports showed at times that over 30% of transactions were either bank-owned homes or short sales.
The sale of distressed properties adversely affected “regular sellers” due to the enormous downward pricing pressure.
No doubt about it, it got ugly.
Time has a way of healing, and several years after the collapse of the housing market, we are seeing continued signs of progress. Sales are increasing, and inventory levels are decreasing.
This week I wanted to share some interesting data that demonstrates that we have come a long way since the bubble burst.
In 2009 there were 86 bank-owned homes (and condos) that sold in Carolina and Kure Beach. The average price per square foot for these properties was $158 per square foot.
In 2010 there were 73 bank-owned homes (and condos) that sold in Carolina Beach and Kure Beach. The average price per square foot was $ 171 per square foot (some higher-end homes drove the price per square foot up).
In 2011 there were 94 bank-owned homes (and condos) that sold in Carolina and Kure Beach, with an average price per square foot of $146.
In 2012 the number of bank-owned sales began to drop, in this case by over 35%. There were 60 bank-owned homes (and condos) that sold at an average of $144 per square foot.
In 2013, year to date, there have been 31 bank-owned home (and condo) sales, at an average price per square foot of $155.
A further sign that the things have recovered is when you look at current inventory. Currently, there are only 8 bank-owned homes (and condos) listed on the market in Carolina and Kure Beach.
Equally as promising, there currently are only 3 “short sales” available for sale on the island. This is a great sign!
To put this in perspective, since 2009, there have been 168 reported short sale transaction in Carolina and Kure Beach. The average price per square foot of these sales was $168.
With this drastic reduction in bank-owned and short sale inventory, I think we will begin to see a modest increase in prices.
‘Comps’ will still remain important as appraisals will dictate the maximum amount a bank will loan on a property, so this remains a very important factor when deciding if it’s time to buy or sell.
Provided by Justin Donaton