Price increases on homes are slowing down throughout the country as the market has now seen a strong recovery, especially in those places that were hit the hardest by the recession. One trend that is occurring, however, is the number of distressed property sales has also been increasing in markets that are seeing price increases. It used to be that markets that were experienced decreased home prices had a higher number of distressed property sales, but this has switched and now markets that are increasing with regards to home prices are also seeing an increase in distressed property sales. To put it into perspective for you, the 15 best performing real estate markets in the country have seen a price increase of a little over 19%; almost 25% of the sales in that market are on distressed homes. Likewise, poorly performing markets throughout the U.S. have seen almost a 5% increase in prices and only 17% of home sales are on distressed properties. This is an interesting trend simply because the real estate markets that were hit the hardest, such as Phoenix, have seen the fastest recovery.
As these trends continue, home price increases have started to steadily slow down; home prices throughout the nation increased by about half of what they did when compared to this time last year. Some homeowners fear that this may signal another sign of housing market trouble however this is typically how the market works; it’s better to have a slower, calmer recovery period. Of course, this also depends on what market you are in. Interestingly enough, hopes in the West and Midwest saw gains in the double digits. In fact, over half of the healthiest markets in the country were in California. Properties in the South and Northeast only saw single-digit increases with the worst performing market being in Houston where they actually saw a 1% price decline.