It seems that there’s no end to the lingering foreclosure crisis anytime soon. If any, distressed sales will continue to make up a huge chunk of home sales in the coming months, if not years. A recent report released by real estate data firm First American CoreLogic revealed that distressed sales, including short sales and sales of bank owned homes, made up 29% of total home sales in January.

The report suggests that the foreclosure crisis continues to rear its ugly head, even though there are occasional drops in foreclosure filings due to government programs aimed at addressing the crisis. However, economists and critics of government efforts argue that the programs are only delaying the inevitable. They also claim that these programs are keeping home prices depressed, and thus further deepening the crisis.

According to CoreLogic’s report, the January figure is the highest since April last year and is not too way off from the peak in January 2009 when distressed sales made up 32% of the market. A breakdown of the data showed that short sales accounted for 8% in January, up from 7% in December 2009 and 5% in January last year. Sales of bank owned homes, known in the industry as real estate owned (REO) properties, jumped to 22% in January, up from 19% in December but lower than the 27% recorded in the same month last year.

The report said that there were approximately 974,000 distressed sales in the last 12 months, of which 740,000 were REOs and 234,000 were short sales. Investing in bank owned homes could well be very profitable in Detroit, which tops the REO market with 48%. California’s Riverside occupies second spot with 47% followed by Las Vegas with 45%. The top short sales markets are San Diego (19%), Sacramento (18%), and Oakland (16%).

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