The Impact of Distressed Properties on the Market
New Castle County Delaware had 3294 closed properties Year to Date in September 2011.
Of those 3294 properties, 279 were short sales or approximately 8.5% and 490 or 14.9% were REO’s or Bank owned properties which puts the year to date total percentage of distressed properties at 23.4%. Distressed properties are defined as properties that are in poor financial condition.
As of September 30,2011 New Castle County Delaware had 3420 active listings with 566 or 16.5% short sales and 164 or 4.8% REO’s for a total of distressed properties at 21.3%.
Kent County had closed sales of 889 Year to Date as of September 2011.
Of those 889 properties, 72 were short sales or approximately 8.1% and 200 or 22.5% were REO’s or Bank owned properties which puts the year to date total percentage of distressed properties at 30.7%.
As of September 30,2011 Kent County Delaware had 1490 active listings with 165 or 11% short sales and 84 or 5.6% REO’s for a total of active distressed properties at 16.6%.
So roughly, one in every four homes sold in New Castle County and one in every three homes sold in Kent County were distressed properties. OUCH!
In Delaware, distressed property continues to be a drag on the market. Out of the current percentage of active short sales, there will be some that eventually become bank owned. Both REO’s and Short Sales also have an effect on market value, by increasing the supply of homes on the market and consequently causing the price erosions that we are currently observing.