Foreclosed Homes at 19% of Sales in 3Q
Foreclosure-related sales accounted for 19% of all residential purchases in the third quarter, according to new figures compiled by RealtyTrac.
Roughly, 193,000 U.S. properties in some stage of foreclosure or bank-owned changed hands in 3Q, a 21% increase from the previous quarter, but down 3% from a year ago.
Unlike recent years, pre-foreclosure sales outnumbered REO sales during this time period: 98,125 to 94,934 units, respectively.
Homes in foreclosure or REO sold at an average price that was 32% below the median value of a retail property, the Irvine, Calif.-based data provider said. This is 3% more than the second quarter. Properties in default or scheduled for auction nationwide were purchased for approximately $191,025, while REOs were bought for about $161,954.
Meanwhile, short sales of properties not in the foreclosure rose 15% from 2Q and 17% year-over-year. These non-foreclosure short sales accounted for 22% of all residential sales, bringing the total distressed sale share to an estimated 41% for the quarter.
Georgia, California and Arizona posted the highest percentage of foreclosure sales, RealtyTrac said.
Daren Blomquist, vice president at RealtyTrac, said the scheduled expiration of the Mortgage Forgiveness Debt Relief Act at the end of this year could impact the upward trend. “The prospect of being taxed on potentially tens or hundreds of thousands of dollars in additional income may motivate more distressed homeowners to forgo a short sale and allow the home to be foreclosed,” Blomquist noted. “Additionally, if the mortgage interest deduction is eliminated due to the fiscal cliff quagmire, it would give many underwater and otherwise distressed homeowners one less reason to hang on to their homes.”