More than a quarter of all home sales in Palm Beach County last year were of bank-owned properties or homes purchased in a short sale, a sign of continued stress on a market where traditionally less than 1 percent of sales are of distressed homes. According to a year-end report released last week by Irvine, Calif.-based RealtyTrac, about 22 percent of sales statewide in 2011 were of homes in foreclosure or short sale. The report measured all deed transactions, not just Realtor sales, said company spokesman Daren Blomquist. Nationwide, distressed sales made up 23 percent of all home purchases. Interesting trend What piqued analysts’ interest was not the sheer number of distressed sales, but a shift nationwide and in Florida at the end of last year toward more short sales and fewer sales of bank-owned homes. A short sale is when a lender agrees to take less for a home than what is owed on the mortgage, while a bank-owned sale is of a foreclosed home that has been reclaimed by the lender. Statewide, short sales were up 3 percent in the fourth quarter of 2011 compared with the same time in 2010, while bank-owned sales were down 32 percent. “The banks know they lose less money through a short sale then a foreclosure,” said Jack McCabe, chief executive of McCabe Research & Consulting in Deerfield Beach. “They don’t have to take ownership, they are not responsible for maintenance, and right now there’s no positive profit involved in this. It’s all about cutting losses.”
