RealtyTrac: Foreclosure Homes Make Up 31% of All Residential Sales
Nationwide sales of homes in some stage of foreclosure or bank-owned status in the second quarter this year accumulated for 31% of all residential sales, according to RealtyTrac.
In the data firm's quarterly foreclosure sales report that looked at properties sold between April and June, this figure represents a 5% drop from the first quarter, but up from the 24% of all sales accumulated in the second quarter of last year.
“With average prices on distressed real estate trending down and average discounts trending up, this report is clearly good news for well-positioned buyers and investors looking for bargain real estate that will build them wealth in the long term and often cash flow as rental real estate in the short term,” said James Saccacio, CEO of RealtyTrac, Irvine, Calif.
Despite the share of total sales increasing from the previous year, sales of real estate in the foreclosure process or REO decreased year-over-year. Third parties purchased 265,087 homes nationwide last quarter, which is down 11% from the same time period in 2010.
However, quarter-over-quarter total sales for preforeclosed properties saw a 19% increase, while REO sales were flat, the report said. Overall preforeclosures, which are often sold by a short sale, had an average sales price of $192,129 across the country. This is 21% below the average sales price of a nonforeclosed home. REOs sold for an average price of $145,211, nearly 40% below a nonforeclosed property.
Nevada had the largest quarterly increase in preforeclosure home sales at 43%, followed by the state of Washington at 39%, California at 38% and Texas at 34%.
The report also determined that the average time to sell short sales averaged 245 days after the initial foreclosure notice was received, down from 256 days in the first quarter. However, REO sales time saw a slight increase to 178 days in the second quarter from 176 days it took during the previous quarter.
“The jump in preforeclosure sales volume coupled with bigger discounts and a shorter average time to sell preforeclosures all point to a housing market that is starting to focus on more efficiently clearing distressed inventory through more streamlined short sales,” Saccacio said. “This gives distressed homeowners who do not qualify for loan modification or refinancing and want to sell a better chance of completing a short sale to avoid foreclosure.”