REO’s, Short Sales and The Delaware Real Estate Market
The Impact of Distressed Properties on the Market
New Castle County Delaware had 2904 closed properties Year to Date in August 2011.
Of those 2904 properties, 247 were short sales or approximately 8.5% and 436 or 15% were REO’s or Bank owned properties which puts the year to date total percentage of distressed properties at 23.5%. Distressed properties are defined as properties that are in poor financial condition.
As of August 31,2011 New Castle County Delaware had 3500 active listings with 533 or 15.2% short sales and 165 or 4.7% REO’s for a total of distressed properties at just under 20%.
Kent County had closed sales of 760 Year to Date as of August 2011.
Of those 760 properties, 67 were short sales or approximately 8.8% and 180 or 23.7% were REO’s or Bank owned properties which puts the year to date total percentage of distressed properties at 32.5%.
As of August 31,2011 Kent County Delaware had 1500 active listings with 173 or 11.5% short sales and 93 or 6.2% REO’s for a total of active distressed properties at 17.7%.
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.