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Baltimore has most distressed home sales in nation, report says

Baltimore had the highest share of distressed home sales of any city in the country, according to a report out this week.

20.7 percent of homes sold in Baltimore, Towson and Columbia during the second quarter of 2018 were distressed, a greater portion than in any of 51 other metropolitan areas surveyed.

Philadelphia came in second, with 20.2 percent. In contrast, San Jose, Calif., had the lowest percentage, 2.8 percent.

Distressed sales are those that fall outside the normal real estate marketplace, said Daren Blomquist, of Attom Data Solutions, the company that published the report. They may be foreclosed, bank-owned properties, so-called short sales in which a homeowner is selling for less than what’s owed on the mortgage, or properties sold at a foreclosure auction.

“Typically the more distressed sales [in an area], that is the worse off a market is doing in general,” Blomquist said. “It’s a negative indicator of market health.”

The low prices of distressed home sales tend to bring down the value of surrounding homes, as appraisers take them into account when determining a sale price.

City Councilman John T. Bullock, who has criticized corporations that buy distressed homes in the city, said the news was “not surprising, unfortunately.”

He expressed concern that homeowners had been booted from their properties. Additionally, he said, distressed homes are often sold to LLCs and thus will stay vacant after purchase.

Baltimore’s rate of foreclosure is also among the highest in the nation, Blomquist said. Additionally, there is a higher than average percentage of properties purchased by institutional investors, or those owning 10 or more properties. But he noted that both numbers are decreasing overall from previous years.

“The other side of the coin on both of these metrics,” he said, “is the numbers are coming down. So that’s the good news. Foreclosure is down, distressed sales are down, but still at elevated levels.”

Tammy D. Hawley, a spokeswoman for the city’s Department of Housing & Community Development, said the data reflected Maryland’s “being a judicial foreclosure state,” meaning that foreclosures must go through court system. That process, she said, “delayed some of the distressed sales trends that were seen earlier in other parts of the country.”

ctkacik@baltsun.com

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