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From the article:
"Ironically, it is a sign of economic health — the diminishing number of foreclosures and distressed properties — that is contributing to the market’s slowing. According to the report, distressed property sales — down 35.7 percent on a year-over-year basis for the first nine months of 2016 — have declined so dramatically that they now are a drag on overall sales through the region.
When the Bay Area was in the throes of recession early in 2009, distressed property sales — “short sales†of underwater properties and sales of foreclosed properties — accounted for an astonishing 69.1 percent of all sales in the region. In the first nine months of 2016, distressed sales accounted for only 8 percent of total sales.
Because most distressed properties sell for $500,000 or less, their diminishing numbers contribute to the shrinking supply of affordable homes. During the first nine months of 2016, sales of homes priced at $500,000 or less fell 26.7 percent on a year-over-year basis throughout the region, while sales of distressed properties in that same price category fell 45.7 percent."
I perused Zillow for the first time in a long time and was surprised at how many foreclosures there were in Santa Cruz zips.
http://www.eastbaytimes.com/2016/11/23/bay-area-real-estate-market-cooling-off-new-report-indicates/