Prices of Distressed Properties Seen at 15% Discount

Distressed properties are selling at prices 15% below other home sales, according to a March survey by the National Association of Realtors. Last year the discount on foreclosure and short sales was normally 20%. But Realtors say they are receiving multiple bids from investors on single-family homes priced at $150,000 and lower. They also are complaining that banks won't release their inventory. The Realtor survey shows that foreclosure sales comprised 24% of existing home sales in March and short sales comprised 12% of sales. Realtors also reported that 11% of sales contracts were canceled in the first quarter as a result of low appraisals. Realtors also noted that sales were delayed or renegotiated because of low appraisals. "The appraisal process continued to draw a significant number of negative comments, particularly as related to selection of comps, the competency of appraisers, and lags between the actual market and appraised values," said Jed Smith, NAR managing director of quantitative research.