Posted on Friday, December 3, 2010
New data released by RealtyTrac Thursday shows that distressed homes – including those in default, scheduled for foreclosure auction, and REO – accounted for 25 percent of all U.S. residential sales in the third quarter.
These properties sold at an average of 32 percent below the price of their non-distressed counterparts. RealtyTrac says that’s the highest distressed-property discount it’s seen since the fourth quarter of 2005.
According to RealtyTrac’s data, the average sales price of homes in the process of foreclosure or bank-owned was $169,523 in Q3, down 2.46 percent from the previous quarter. By comparison, the tracking company says the average sales price of non-distressed properties was $249,721, up 6.42 percent from the second quarter.
RealtyTrac reported that 113,933 REO homes sold to third parties during the July to September period. That’s 26 percent fewer than were sold in the previous quarter and down nearly 35 percent from the third quarter of 2009. REOs sold for an average discount of about 41 percent.
A total of 74,815 pre-foreclosure, typically short sale, transactions were completed in the third quarter, down 24 percent from both the previous quarter and year-ago levels, based on RealtyTrac’s findings. Pre-foreclosure sales went at an average discount of 19 percent.
All in all, 188,748 U.S. properties in default, scheduled for auction, or bank-owned sold to third parties last quarter. RealtyTrac says that figure represents a decrease of 25 percent from the previous quarter and is 31 percent below the third quarter of 2009.
“The expiration of the homebuyer tax credit…created a substantial dip in…buyer demand in the third quarter,” said James J. Saccacio, RealtyTrac’s CEO. “The foreclosure-processing controversy, which was brought to light at the very end of the third quarter, could chill demand even further.”
Saccacio continued. “A quick but responsible resolution to that issue would be ideal to help the market continue to properly clear out foreclosure inventory and get distressed properties into the hands of qualified buyers and investors who will likely add value to those properties and the neighborhoods they are in.”
Nevada, Arizona, and California posted the highest percentage of distressed property sales during the third quarter. In Nevada, they accounted for 54 percent of all homes sales; in Arizona, 47 percent; and in California, 40 percent.
Ohio, Kentucky, and Tennessee saw the biggest discounts for distressed sales, ranging between 45 and 42 percent. Other states with average discounts above the 40 percent mark were Illinois, New Jersey, Michigan, Pennsylvania, and Georgia.By: Carrie Bay DSNews.com