Troubled properties–including foreclosures and bank-owned units–accounted for 23% of all home sales in the second quarter, a slight increase from 1Q, according to new figures compiled by RealtyTrac.
A year ago foreclosures and REO accounted for 19% of sales.
The Irvine, Calif.-based analytics reported that buyers snatched up 224,429
In other words, although troubled properties as a percentage of sales increased slightly, REO sales overall are falling.
Third parties purchased 117,131 REO properties in 2Q, while 107,298 pre-foreclosure—in default or scheduled for auction—homes were sold.
Both the REO and short sale numbers were down from the same time period a year ago: 31% and 9%, respectively, reflecting the low supply of inventory currently on the market.
“The second quarter sales numbers provide statistical evidence of what we’ve been hearing anecdotally from real estate agents, buyers and investors over the past few months: there is a limited supply of available foreclosure inventory to choose from in many markets,” said Daren Blomquist, vice president of RealtyTrac.
Despite the national decrease, short sales outnumbered bank-owned sales in13 states and Washington, D.C. Additionally, short sales increased on an annual basis in 16 states, including Michigan (up 42%), Illinois, (35%), Connecticut (27%) and Massachusetts (27%).
Short sales sold for an average price of $185,062 in the second quarter, 26% below the median price of a non-foreclosure home. It took approximately 319 days to sell these properties after starting the foreclosure process, RealtyTrac said, which is up from 306 days in the first quarter and 245 days last year.
Meanwhile, REO homes were bought for about $155,892, which is 37% below the average sales price of a traditional home. Bank-owned properties took 195 days to close in the second quarter, an increase of 17 days from the previous quarter.
As a supplement to the report, RealtyTrac reviewed short sale transactions that are taking place nationwide but not yet in foreclosure. The firm found these transactions increased 18% on a year-over-year basis for the period of January through May, which also accounted for 14% of all residential sales during this time.
“The increase in short sales of properties that have not even started the foreclosure process indicates that lenders are moving further upstream to deal with their distressed inventory, thereby avoiding the increasingly complex and lengthy foreclosure process altogether,” Blomquist added. “Three straight months of increasing foreclosure starts through July may ease the inventory shortage somewhat in the coming months when many of these foreclosure starts translate into listed short sales or bank-owned homes.”
