Second consecutive month in August

If the cash sales share continues to fall at the same annual rate it did in August 2016, the share should hit 25% by mid-2019. This is a big delay from last month’s prediction, which put cash sales at their pre-crisis level by mid-2018.

Real estate owned sales had the largest share of cash sales in August at 58.6%, followed by resales at 31%, short sales at 29.1% and newly constructed homes at 15.6%.

While REO sales have the highest percentage of cash sales, they make up only 4.6% of the market. Short sales make up 2.7% of the market, putting distressed sales at 7.3% of the market, the lowest share for any month since September 2007.

At their peak in 2009, distressed sales made up 32.4% of the market, and REOs were 27.9% of that. On the other hand, pre-crisis distressed sales levels averaged 2%. If the current year-over-year decrease in the distressed sales share continues, it will reach that “normal” 2% mark in mid-2018.

The state with the largest share of distressed sales was Maryland with 19.1%, followed by Connecticut at 18.5%, Michigan at 17.7%, New Jersey at 15.9% and Illinois at 15.3%.

North Dakota had the smallest share of the market’s distressed sales at 2.6%.

Salem Five Bank vice president Jason Anker gives homebuyers advice on how they should approach the housing market now that rates are increasing.

From the article:

“I tell people, interest rates are 80% psychological and 20% math. I do the math for them and their next reaction is, ‘Oh that’s all?’ Forty dollars a month, $75 a month. They initially think it’s going to be a lot more painful than that,” said Anker, who added he hasn’t lost any deals yet. “I am concerned. My advice to clients right now is to be extremely defensive.”