More trouble for the housing market?

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This is not a good sign.

(Click on the chart to make it larger.)

There’s long been a worry that after last year’s various foreclosure moratoria lifted, we’d see a fresh surge of trouble in the housing market. The latest figures on distressed sales, from First American CoreLogic, lend some weight to that argument.

As you can see in the chart above, distressed sales—which include sales of bank-owned properties and short sales—are again on the rise. In January, such sales accounted for 29% of all existing homes sold. That’s the highest level since April 2009. The peak came in January 2009, when distressed sales accounted for 32% of all existing homes sold.

Now, there is a sliver of good news in these numbers. Short sales—in which a lender agrees to take less than it is owed—are on the rise. Short sales accounted for 8% of all existing-home sales in January, up from 7% in December and 5% a year ago. That’s good news because it indicates an increased willingness on the part of lenders to negotiate—and to let home owners walk away with their credit in somewhat better shape.

And even with the recent uptick, distressed sales in most markets are still below where they were a year ago. Here’s a year-over-year chart of the top 25 largest markets: