Foreclosures account for 1 in 4 home sales
June 01, 2012
Unfortunately for those concerned that foreclosures are driving down home values, there doesn't seem to be any slowdown in the glut of distressed properties on the market, according to a new survey.
According to the latest data from RealtyTrac, an online marketplace for foreclosed properties, 26 percent of sales during the first quarter of 2012 were for homes in some stage of foreclosure. Short sales also hit a three-year high during that period.
Several states had foreclosure sales rates far exceeding the national average. More than half of all sales in Nevada -- 56 percent -- were for homes in some stage of foreclosure. In California and Georgia, nearly half of all home sales in the first quarter were foreclosures at 47 percent and 46 percent, respectively.
Foreclosure sales increase, prices decrease
The number of foreclosed homes sold during the first quarter of 2012 represents a 4 percent increase from the previous quarter.
At the same time, the average price of foreclosed properties dropped 1 percent from the previous quarter. During the first three months of 2012, foreclosed or bank-owned properties sold for an average of $161,214. That is 27 percent less than the average price of homes that were not in foreclosure or banked-owned.
Overall, 21 states saw a quarterly increase in the number of bank-owned sales. The following states had the largest percentage increase in these sales for the first quarter of 2012:
- Oregon: 41 percent
- North Carolina: 23 percent
- Ohio: 21 percent
- Florida: 13 percent
- Wisconsin: 13 percent
Short sales up 25 percent from last year
While foreclosures continue to make up a significant portion of home sales, it appears more homeowners are using pre-foreclosure sales to avoid bank repossession. Commonly completed as short sales, these transactions accounted for 12 percent of all home sales during the first quarter of 2012. That number is up from 9 percent during the first quarter of 2011 and represents a three-year high for short sales.
Twenty-seven states saw in an increase in short sales and other pre-foreclosure transactions. The following are the states with the greatest percentage increase in these sales as compared to the previous year:
- Wisconsin: 94 percent
- Michigan: 81 percent
- Georgia: 80 percent
- Texas: 46 percent
- Illinois: 46 percent
Homes sold in pre-foreclosure sales had an average price of $175,461. Although higher than the average price for foreclosure sales, the average price for short sales lagged 21 percent behind that for non-foreclosure homes. It also represents the lowest average quarterly price recorded for short sales since RealtyTrac first started its reporting in 2005.