Distressed property sales have decreased significantly since 2011. Distressed homes like foreclosures and short sales create market volatility while putting homeowners into financial hardship. Distressed property sales often leave big winners and big losers, doing little to strengthen or deepen the housing market overall. The Gallatin County’s distressed sales have fallen off significantly, as seen by the tables below (click to expand):
A Deeper, Stronger Market
Distressed sales have dropped off significantly since 2011. Peaking in 2011 with 148 successful short sales, only 7 short sales took place in 2015. Foreclosure sales peaked at 298 in 2011, but have fallen to only 40 in 2015. With less homeowners falling into financial straits, non homeowners have had renewed confidence in the housing market’s ability to bring a return on their investment. Homeowners are building equity, with 97% of Montanans once again in the black.
The following graphs from the Gallatin Association of Realtors showcases how sales have fallen and how they have taken a far less significant percentage of home sales (click graphs to expand):
The Gallatin Association of Realtors did a great job showing how distressed sales have dropped, but at Hart Real Estate Solutions, we wanted to take the data a step farther. Below, we’ve analyzed how both short sale and foreclosures market shares have dropped by consistent rates since 2011, showing that the market has dropped in volatility.
Short sales have taken a smaller percentage of total home sales each year since 2011. From 2011 to 2015, short sales fell from 10.18% of all home sales to 0.3% of all home sales, representing a 97.05% share decrease.
Since 2012, short sales have seen their share of the market decrease by more than 60% each subsequent year. From 2012 (8.07% of all home sales) to 2013 (2.95% of all home sales), short sales fell by 63.44%. From 2013 (2.95% of all home sales) to 2014 (0.87% of all home sales), short sales fell by 70.51%. From 2014 (0.87% of all homes) to 2015 (0.3% of all homes), short sales fell by 65.52%.
Foreclosures have also taken a smaller percentage of total home sales each year. From 2011 to 2015, foreclosures fell from 20.50% of all home sales to 1.72% of all solds, representing a 91.61% share decrease.
Since 2012, foreclosures have seen their share of the market decrease by approximately 50% each subsequent year. From 2012 (14.55% of all home sales) to 2013 (7.47% of all home sales), foreclosures fell by 48.66%. From 2013 (7.47% of all home sales) to 2014 (3.62% of all home sales), foreclosures fell by 51.54%. From 2014 (3.62% of all home sales) to 2015 (1.72% of all home sales) foreclosures fell by 52.49%.
Summary: As distressed property sales continue to drop, local residents should only expect a stronger, deeper market. Distressed sales inevitably have sweeping impacts over the United States economy because they are usually a majority of a homeowner’s financial burden. Having less sales means there are less distressed properties. Having less distressed properties means there are less people scraping by. Now that more buyers and sellers alike have more financial breathing room to contribute to economic growth, home sales and values should continue to increase, strengthening the market overall.