Home Improvement Spending on Distressed Properties: 2011 Estimates
N13-1: In recent years, the number of distressed residential properties in the U.S. has increased. According to estimates from CoreLogic, distressed home sales, including both foreclosed homes and short sales, surpassed one million in 2011, comprising 27 percent of all home sales. While a slight decline from the 2009 peak, this recent level still marks a significant increase from 2007, when distressed sales totaled 338,000, then 6 percent of total home sales. Growth in the numbers of distressed homes affects the home improvement and repair industry as the homes may require increased levels of maintenance and improvement spending to counter underinvestment by the financially-stressed prior owners. But while the level of investment in these homes is potentially significant, no systematic information is available to gauge the size of this market. To fill this void, this research note draws upon a range of private and public data sources to estimate the scale of spending on distressed properties that were sold in 2011.