In February, 39 percent of real estate transactions in the US were sales of foreclosed homes or short sales, which we will call distressed sales. A foreclosed home sale is carried out by a lender that took the home back because the owner was not making payments on the mortgage. A short sale is the sale of a home that is still in the possession of the homeowner, but the sale amount is less than is owed to the lender so that the lender will be taking a loss. Lender approval is needed to complete a short sale. In both cases, the sellers are motivated more by getting the home sold than by getting the maximum price. A high proportion of distressed sales creates considerable downward pressure on home prices. Knowing that, it is worth understanding the share of such sales in the West Sound area.

In North Kitsap, distressed sale properties represent 19 percent of listings but 30 percent of the sales. In Jefferson County, the proportion of listings is a much lower 8 percent, but the share of sales is similar at 28 percent. On Bainbridge Island, the figures are 15 percent of listings and 29 percent of sales.

With distressed sale properties representing 28 to 30 percent of sales, our area is much better off than the 39 percent national average. However, the share of sales is significantly higher than the share of listings, meaning a lot of buyers are migrating to the lower prices typical with these distressed sale properties. The remaining sellers find it more difficult to find a buyer, and when they do find one, they may have to accept more price concessions to remain competitive.