Foreclosed Homes Account for 25% of Home Sales

December 3 2010 (Jeff Alan)
foreclosure-investing
RealtyTrac has released its third quarter 2010 U.S. Foreclosure Sales Report, which shows that a total of 188,748 U.S. properties in some stage of foreclosure, whether it be by default, scheduled for auction or real estate-owned (REO), sold to third parties in the third quarter, a decrease of 25 percent from the previous quarter and a decrease of nearly 31 percent from the third quarter of 2009.

The report also revealed that the average sales price of properties that sold while in some stage of foreclosure was more than 32 percent below the average sales price of properties not in the foreclosure process, up from a 26 percent discount in the previous quarter and a 29 percent discount in the third quarter of 2009.

The average sales price of properties in some stage of foreclosure was $169,523, down 2.46 percent from the previous quarter and down 0.44 percent from the third quarter of 2009. The average sales price of properties not in foreclosure was $249,721, up 6.42 percent from the previous quarter and up 4.36 percent from the third quarter of 2009.

Sales volume of non-foreclosure properties decreased 29 percent from the previous quarter and nearly 31 percent from the third quarter of 2009.

Foreclosure sales accounted for more than half of all home sales in Nevada (54%), followed by Arizona (47%) and California (40%), but all were lower than previous periods.Properties in some stage of foreclosure in Nevada, California, and Arizona sold for an average discount of 19, 39, and 25 percent respectively.

Ohio, Kentucky, and Tennessee posted the highest foreclosure discounts in the third quarter.

“The expiration of the homebuyer tax credit in the second quarter created a substantial dip in overall buyer demand in the third quarter,” said James J. Saccacio, chief executive officer of RealtyTrac, in a release. “The foreclosure-processing controversy, which was brought to light at the very end of the third quarter, could chill demand even further — particularly for foreclosure properties.”

Tags: foreclosure sales report, REO, average sales price, foreclosure process, sales volume, foreclosure discounts, homebuyer tax credit