Healthy distressed market?

It's hard to know what to think about the Orange County real estate scene. We do know people are really into distressed properties, which makes sense considering no non-distressed, non-heavily motivated seller in their right mind would even try to put their home on the market now.

We also know many people want homes that cost less than $500,000. That also seems reasonable, considering what the majority of "regular" people here actually earn - despite the area's glitzy reputation.

What to expect in 2009? We can't confidently say because there are just too many factors in play - how bad will the economy get, or will it recover; what effect will potential legislation or government action (cramdowns, foreclosure suspensions, etc.) have on how people buy and sell real estate; what is the collective mindset about real estate and do people want to buy it? The list of questions could go on and on.

The Register reports (with the help of Steve Thomas at Altera) today that distressed properties listed for sale are at a 10-month low. That is to say, the total number of active homes that are short sales and foreclosures is falling.

But look at these stats:
*69% of pending sales are on distressed properties
*70% of homes $250,000 and below are distressed
*66% of homes $250,000-$500,000 are distressed
*53% of all pendings are in the $0-$500,000 range (though Thomas' totals don't add up, so this data is likely compromised)

There is no way, no way at all this is a healthy real estate market. Check back very soon for our first property feature of the week!