Real Estate

CAR: Equity sales soar, bank-owned deals tumble in May

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.

The Bay Area is the most expensive market in California.
The Bay Area is the most expensive market in California.

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.