If you are buying real estate in California, the odds are almost fifty-fifty that you are putting money down on some sort of distressed property, be it real estate owned (REO) property or a short sale home. According to the California Association of Realtors (CAR), around 48 percent of pending home sales in California are REO or short sales, with the former coming in at 28 percent and the latter logging in at a little over 19 percent. While these numbers make it sound like distressed sales are taking over the market, in reality they have remained unchanged since April, which potentially indicates some stabilization. In fact, while the percentage of distressed sales has remained steady, “May  marked the first year-over-year increase in pending sales since November 2009,” points out Beth Peerce, CAR president, adding that the increase in sales volume is “consistent with our expectation that home sales in the second half of 2011 should be higher compared with the second half of 2010.”
Of course, as is true on a larger scale nationally as well, in California the stabilization and hint of recovery is largely regional. In Madera County (just north of Fresno), distressed sales accounted for 90 percent of the market. It should also be noted that not everyone agrees with CAR’s statistics. Other sources report that the percentage of distressed sales is up slightly from last year, climbing from 46 to 48 percent.
Do you think that these numbers are meaningful in terms of a recovery, or are they more indicative of the nature of the market for months or years to come?
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