Distressed properties that are either in some stage of foreclosure or bank-owned accounted for 21% of all U.S. residential sales during the first quarter, according to data from RealtyTrac.
A total of 190,121 housing units in foreclosure or REO were sold in 1Q13, down 18% from the prior quarter and a 22% drop from a year ago.
“We expected foreclosure-related sales to be lower given the downward trend in new foreclosure activity nationwide over the past two and a half years,” said Daren Blomquist, vice president at RealtyTrac.
But Blomquist was surprised that non-foreclosure sales, including short sales, accounted for 15% of all sales activity, especially since 11 million homeowners nationwide are underwater. Overall, the volume of short sales fell 10% quarter-over-quarter and decreased by 35% compared to the same time period last year.
“Rising home prices in many markets are stunting the continued growth of short sales be reducing incentive for both underwater homeowners and lenders,” Blomquist added. “Underwater homeowners may be willing to stick it out a few more months or even years in the hope that they will be able to walk away with money at the closing table and without a hit to their credit rating, and for lenders a failed short sale may no longer translate into bigger losses down the road given that average prices of bank-owned homes are rising—at a faster pace than nondistressed home prices in many markets.”
States with the biggest percentage of
The average sale price of a foreclosure-related property was $167,095 in 1Q, down 1% on a quarterly basis, but up 3% on a yearly basis, which represents the fourth consecutive quarter with an annual increase.
REO sales in the first quarter were down to their lowest level in five years, as third parties purchased 101,371 bank-owned properties. This figure is 16% less than the last quarter and a year-over-year difference of 23%.
Despite the decrease nationwide, Ohio (up 48%), North Carolina (46%), Illinois (35%), Missouri (27%), and Florida (12%), all saw annual upticks in REO sales.
In the first quarter, REO properties sold for an average price of $147,810, which is 38% below the average price of a non-foreclosure residential property, the Irvine, Calif.-based real estate information provider said.
Meanwhile, short sale percentage activity for the quarter was greatest in Rhode Island, Connecticut, Massachusetts, Nevada, Florida and Ohio. Residential homes that sold via short sale averaged $178,392. Furthermore, RealtyTrac said the highest average market value of first quarter short sales included New York at $476,292, followed by Hawaii at $438,563, Massachusetts was $313,831, Connecticut at $276,452 and California was $247,618.
