Sales of distressed property in Whatcom County declined in 2012, but it's unclear whether that aspect of the real estate bubble burst is beginning to improve.
Last year 23.6 percent of all local residential sales were either short sales or in some stage of foreclosure, according to RealtyTrac, a national online database for foreclosure property. That's down from 29.7 percent in 2011, according to the report.
Coldwell Banker Bain, which has an office in Bellingham, recently issued its own distressed home report, indicating 21.2 percent of local residential sales were distressed property in 2012, down from 24.2 percent in 2011.
The differences in the two reports could be in how the data is gathered, said Gragg Miller of Coldwell Banker Bain.
Both reports show a decrease in those sales, as well as a significant discount in price for those that bought distressed property. RealtyTrac estimates that Whatcom properties in some stage of foreclosure sold for 20.6 percent less than homes not in foreclosure. Coldwell Banker Bain estimates the average discount for homes going through the short-sale process was 18.5 percent compared to non-distressed properties.
While the glut of distressed properties is expected to ease if the market continues to improve across the country, it could take a little longer in Washington and a few other states, said Daren Blomquist, vice president of RealtyTrac. That's because those states enacted legislation that slowed down the foreclosure process, possibly creating a backlog that still needs to be worked through.
Low inventory in Whatcom County and other parts of Washington may help in the sale of distressed property, Miller said. He expects the distressed property "discount" to lessen in the coming year because overall inventory locally is low enough that it's making those properties more attractive.
"March and April are critical months in determining how much we will have, but I think inventory will be tight this year," Miller said.
Across the U.S., 947,995 distressed properties sold in 2012, down 6 percent from 2011 and down 11 percent compared to 2010. Those properties sold in 2012 represented 21 percent of total sales.
California, Georgia and Nevada posted the highest percentage of foreclosure sales in 2012.