Distressed properties in Los Angeles County accounted for 51% of homes sold during March, down from a total of 56% in February, according to the California Association of Realtors yesterday.
Distressed properties include foreclosures and those advertised for sale by the mortgage provider.
While 51% may seem like quite a high figure, it is actually a lot less than other nearby areas. However, even the worst hit areas of California saw improvements in the situation last month.
For instance, San Bernardino County listed 71% of its sales as being distressed properties, down from 76% in February, while in Riverside County 67% of home sales were distressed ones, though this was also down on February’s total of 71%.
As CAR President Beth L. Peerce explained, “Virtually all counties in the state have shown a consistent improvement in the number of distressed sales.”
However, she was quick to point out that while the situation is improving, there is still a long way to go. “Distressed sales remain higher than they were this time last year in most counties. This is because it takes time for the market to go through the large amount of troubled mortgages,” added Preece.
The highest percentage of distressed property sales was in Solano County, with 76% in March, while the two counties with the lowest number were Marin County at 28%, and San Diego County at 32%.
“We are seeing more lenders managing to execute short sales before foreclosure is forced upon properties,” said Metrostudy’s Steve Johnson, a senior real estate consultant.
“By letting the bank know you are in difficulties, they are able to market them quickly with short sales. This is often a much more preferable situation for all parties involved.”
Johnson also revealed that investors are behind a large number of distressed property sales.
“Many investors are out there, buying properties, sprucing them up, then re-listing them to make a quick profit,” he said.
Despite last month’s improvement, California still sees more distressed property sales than the national average, which was 40% over the last month, according to Lawrence Yun of the National Association for Realtors.