Posted on Friday, March 18, 2011
Recent data released by FNC, Inc reveals that 2008 and 2009 were the worst in terms of market distress, with more than 25 percent of foreclosed properties liquidated at a more than 40 percent discount.
The data reveals that since then, only the bottom quartile of foreclosure sales have been so discounted. The remaining 75 percent has seen modest improvement.
In 2010, one of the hardest hit states saw improvement. The FNC study revealed among the top 30 Metropolitan
Statistical Areas that FNC studies, six key California markets incurred the smallest foreclosure discounts.
Ohio saw three of its major cities ranked among the most distressed markets, with an average 42 percent price discount in foreclosure sales.
The Oxford, Mississippi-based company says the way they measured the data used for the study gives a more precise look at the impact of discounts in distressed areas.
“Existing measures of foreclosure discount simply report the ratio of average liquidating price of foreclosed properties to average sales price of non-distressed sales,” says Yanling Mayer, senior research economist at FNC, Inc.
He continued, “While useful as a general indicator of market distress, the foreclosure discount computed as such cannot be used reliably to measure the impact of market distress on the final liquidating price of foreclosed homes. Foreclosure and non-foreclosure sales samples are generally not comparable because of the differences in size, non-size physical attributes and conditions, neighborhoods, etc.”
By: Joy Leopold, DS NEWS