'Motivated Sales': A Bigger Piece of the Home Sales Pie

A new report shows that 'motivated sales' are representing a larger share of total sales.

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Radar Logic's Monthly Housing Market Report for November found that "motivated sales"--bank sales of foreclosed homes, for example--are accounting for a larger piece of the total home sales pie.

On the whole across Radar Logic’s 25 MSAs, motivated sales decreased on a month-over month basis for the second month in a row. In October, the 25-MSA motivated transaction count contracted for the first time in 2008, decreasing 3% relative to September. In November, motivated sales continued to contract, declining 7% from October levels. Notwithstanding the decrease in the 25-MSA motivated transaction count, motivated sales became a larger percentage of total sales. On the whole across the 25 MSAs, the quantity of other sales declined by 18% in November, while the quantity of motivated sales declined by 7%. Thus, while motivated transactions accounted for 28% of total sales in October, they accounted for 31% or total sales in November…

Barring government intervention or an increase in loan modifications by banks, foreclosures and motivated sales are likely to increase over the coming year if unemployment continues to rise. According to a report released in January by the U.S. Conference of Mayors, New York, Los Angeles and Miami are expected to suffer the greatest job losses between the Q4 2008 and Q4 2009. New York is expected to lose 181,000 jobs, Los Angeles is expected to lose 164,000 jobs and Miami is expected to lose 85,000 jobs.