Bidding wars and double-digit price gains are greatly increasing the number of equity sales – and reducing bank-owned transactions.
Almost four of every five home sales (78.2%) were equity transactions in May, meaning the homeowner leaves with some money in her pocket. The current rate compares to 75.6% in April and only 55.8% in May 2012, according to the California Association of Realtors.
It’s a dramatic about-face for the housing market, where more than half of all home deals were distressed sales just a few years ago.
In fact, short sales dropped to 14.0% of transactions in May, compared to 21% a year ago – and the lowest level since July 2009. And bank-owned sales, also known as REOs, fell to 7.3% in May vs. 22.8% a year ago.
Five counties – Contra Costa, Mendocino, San Diego, San Mateo and Santa Clara – reported single-digit percentages of distressed sales.
But just as coastal counties are thriving, several inland areas continue to struggle. More than half of Madera County’s deals were distressed sales (52%) in May, followed by nearby Stanislaus County at 40%. And distressed sales were at least one of every three deals last month in six other counties, according to CAR.