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REO and Short Sales to Remain Elevated until 2017

While the share of home sales accounted for by distressed properties continues to drift lower, only two states are approaching what could be considered normal levels.

Only North Dakota and the District of Columbia are approaching normal levels of distressed sales. At the current rate of decline CoreLogic it will be mid-2017 before the national as a whole returns to a 2 percent share.

CoreLogic said on Thursday that sales of lender-owned real estate (REO) and short sales made up 11.1 percent of residential real estate transactions in April, down 3 percentage points from April 2014.

REO sales made up 7.4 percent of sales and short sales 3.7 percent which is far below the peak of 32.4%.

Several states are still seeing very high distressed sales numbers. Michigan is highest at 21.7 percent, only a fraction ahead of Florida, also at 21.7 percent. Maryland, Illinois, and Connecticut all had April distressed sales representing slightly more than 19 percent of the total. The greatest improvement has been in California which has dropped by 57.8 percentage points from its January 2009 peak of 67.5 percent.

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