Distressed homes accounted for only eight percent of all home sales in August. Six percent of sales were foreclosures, while only two percent were short sales. This is the second straight month the number of distressed homes remained in the single digits. A year ago, distressed homes represented 12 percent of the market. And fewer distressed homes available for sale led to higher prices; foreclosures sold on average 14 percent below market value in August, compared with 20 percent in July. Short sales, meanwhile, were only discounted 10 percent in August, while a month earlier they were 14 percent below market value.
Fewer Investors Buying
For the second consecutive month, all-cash sales dropped; only 23 percent of transactions in August were all-cash, the lowest market share since December 2009. Individual investors account for most all-cash offers, and while 12 percent of all homes on the market in August were purchased by individual investors, this is down from 16 percent a month ago and 17 percent a year ago. The drop in investor activity is good news for buyers who depend on traditional financing to make a home purchase. Less competition means a larger supply of inventory. Yet first-time buyers also seem to be daunted by the high home prices. In August, 29 percent of all buyers were first-time purchasers. For 16 of the past 17 months, first-time buyers accounted for less than 30 percent of the housing market.
Bigger Price Tags
For the thirtieth consecutive month, home prices have climbed year-over-year. August saw the median existing-home price peak at $219,800, a healthy 4.8 percent above August 2013. Across
the country, only the Northeast reported a drop in home prices, a decline of 0.8 percent from a year earlier. The Midwest and the West saw median prices climb 5.9 percent and 5.4 percent, respectively. And in the South, home buyers saw a price increase of 4.7 percent.
Home Sales Decline
Existing-home sales reached 5.05 million in August, the second-highest sales pace of the year. Sales were down 1.8 percent from July and 5.3 percent from August 2013. The year-over-year drop was seen in all regions of the country. In the Northeast, sales rose 4.7 percent from July but fell 4.3 percent from a year earlier. Sales in the Midwest were also up from July by 2.5 percent but down 3.9 percent from August 2013. In the South and the West, monthly sales declined by 4.2 percent and 5.1 percent, respectively. Sales remained 4.2 percent below August 2013 in the South and 9.8 percent in the West.