Home sellers realized an average price gain since purchase of 11% ($20,378) last year, the biggest average price gain since 2007, according to RealtyTrac's Year-End 2015 U.S. Home Sales Report.
The increase marked the second consecutive year where home sellers saw an average price gain following six consecutive years where home sellers realized average price losses. Distressed sales (foreclosures and bank owned) and short sales combined accounted for 17.3% of all sales last year, an eight-year low.
"With some local market exceptions, the 2015 home sales data paints the picture of a properly functioning U.S. housing market where homeowners can once again count on real estate as an appreciating asset - a long-touted axiom soundly debunked as ironclad truth between 2008 and 2013," said Daren Blomquist, vice president at RealtyTrac. "This return to consistent home price gains for sellers should reinforce confidence in real estate in 2016 and produce another year of solid sales volume as homeowners cash out their equity gains."
States with the highest share of distressed and short sales combined in 2015 were Illinois (28.1%), Florida (26.4%), Maryland (24.7%), Nevada (21.7%) and Connecticut (20.7%). Sales of homes in the foreclosure process but not yet bank-owned accounted for 3.5% of all single family and condo sales last year, down from 4.6% in 2014 and down from 5.4% in 2013 to the lowest level since 2007, when 2.8% of all home sales were properties in the foreclosure process. The peak in the share of in-foreclosure sales was 2010 at 8.7%.Short sales of homes not in foreclosure or bank owned accounted for 5.1% of all single family and condo sales last year, down from 5.4% in 2014 and down from 6.4% in 2013 to the lowest level since 2008, when 3.3% of all home sales were short sales. The peak in short sales was 2012 at 8.1%. A short sale is when the sales price of the home is less than the combined amount of loans secured by the home.Among the nation’s 46 markets with a population of at least 1 million, those with the biggest year-over-year increase in home prices were St. Louis (19% increase), Raleigh, N.C. (17% increase), Detroit (17% increase) and Tampa (15% increase), with Denver, Seattle, San Jose and Providence, R.I., all posting increases of 13%."The drop in short sales, REOs, foreclosures, and institutional investors can all be attributed to the rapid price growth we continue to see in the greater Seattle area," said Matthew Gardner, chief economist at Windermere Real Estate, covering the Seattle market. "Market values have simply increased to a point whereby it’s unlikely that we’ll have much distressed supply growth other than as a function of banks working through old inventory. This has also had an impact on distressed home prices which are unsurprisingly on the rise due to woefully low inventory levels and buyer competition."