Real estate agents surveyed say distressed home sales nearly half of market
Distressed home sales took up 47.5% of the total home purchases in September, up from 45.7% in August and 44.8% a year ago, according to a survey of more than 3,000 real estate agents. Campbell Surveys and Inside Mortgage Finance tapped a network of agents across the country to determine home sales and mortgage patterns. In September, distressed properties, or those sold that have been foreclosed on or in the foreclosure process, were taking more and more of the market share as first-time homebuyer activity continues to slow. And banks are unloading more damaged REO properties. The sales of these homes increased from 13.6% of the market in August to 14.7% in September, one of the sharpest jumps this year. But with the recent foreclosure problems in major banks and servicers, delays will begin to push the amount of REO inventory down. Bank of America (BAC), Ally Financial (GJM) and JPMorgan Chase (JPM) halted sales in a majority of the country, putting more pain on real estate agents, who are still struggling without the homebuyer tax credit. For 2009 and into 2010, the amount of first-time homebuyers and REO levels were parallel, but since the tax credit expired in April, this demand has dropped from as high as 42.4% in June to 34.4% in September. Without the government-induced demand, the housing recovery has been put on hold, according to Thomas Popik, research director for Campbell. "Current homeowners sell a home when they buy a home, resulting in no net take-up. Likewise, many investors buy, rehab and sell, providing no take-up," Popik said. "In contrast, first-time homebuyers absorb excess housing stock. However, in recent months, they have been able to play this role less frequently because of restricted financing." Write to Jon Prior.