Housing market still in distress in San Luis Obispo County.

Distressed sales encompassed 44% of all home sales in the second quarter of this year. This is better than last year in which distressed sales were about half of all sales.

In a normal market, foreclosure sales account for 5% or less of all sales. This 44% of distressed sales is a sure indicator that the market is still struggling to absorb the high number of these properties.

According to some experts, it is going to take a couple of years to flush out all these distressed properties. It is not all bad news because many of these properties are attractive buys for both homeowners and investors. In fact, these homes are bought for 23% below market value.

These properties are keeping pirces on homes down and there is still possibility that a further decline is inevitable. The expectation is prices will continue to be stagnant over the next two years.