Foreclosure Sales Increase as Homebuyers Look for Deals

Before you go, we thought you'd like these...
Foreclosure sales increase.Many Americans are still having trouble obtaining mortgages thanks to high credit standards set and maintained by lenders, but a large number are also now turning to less expensive properties to make their dreams of homeownership come true.

In the third quarter of the year, consumers snatched up 193,059 properties that were in some stage of the foreclosure process or considered bank-owned, up 21 percent from the number seen in the previous three-month period, according to new data from the real estate data firm RealtyTrac. However, despite that increase, the level of foreclosure purchases remained 3 percent below that seen in the same quarter last year.

Nonetheless, foreclosure-related sales also accounted for 19 percent of all residential transactions in the U.S. between July and September, which held steady from last year's ratio, but was down 20 percent from the previous quarter, the report said. On the other hand, sales of homes in the foreclosure process outnumbered those that lapsed into being REO properties, which runs against trends observed during the past few years. In all, there were 98,125 sales of homes in pre-foreclosure, compared to just 94,934 transactions of properties that were REO, or "real estate owned" (another term for lender-owned). That may indicate that in many cases, completed foreclosures are being seen as less attractive options for banks and homeowners alike.

Related: Search AOL Real Estate's Foreclosure Listings

"The shift toward earlier disposition of distressed properties continued in the third quarter as both lenders and at-risk homeowners are realizing that short sales are often a better alternative than foreclosure," said Daren Blomquist, vice president of RealtyTrac.

In all, pre-foreclosure sales climbed 22 percent from the previous quarter and on an annual basis, the report said. Meanwhile, the average price of those transactions declined 3 percent on a quarterly basis and 5 percent year-over-year. At the same time, REO sales rose 19 percent from the period between April and June, but slipped by 20 percent from the third quarter of last year. Prices were down 7 percent from those in both previous timeframes.

Related: 4 Secrets to Scoring a Bank-Owned Property Deal

Consumers may be more interested in buying homes either approaching or past the point of foreclosure because of the far lower price tag, but also because prices for other, healthier properties have been on the rise in recent months. Experts believe the latter trend could continue through the end of next year at least.

See more on Credit.com:
Many Don't Take Advantage of Mortgage Interest Deduction
How a Mortgage Can Help (or Hurt) Your Credit
What You Need to Know About Off-Season House Hunting

More on AOL Real Estate:
Find out how to
calculate mortgage payments.
Find
homes for sale in your area.
See celebrity real estate.
Find homes for rent in your area.

29 PHOTOS
Multimillion-Dollar Foreclosures
See Gallery
Foreclosure Sales Increase as Homebuyers Look for Deals

Location: Cherry Hills Village, Colo.
Price: $4.995 million
Beds/baths: 6/8
Sq. ft.: 11,949

If you can believe it, the price of this gorgeous Colorado homestead -- which the listing calls "the best lot in Cherry Hills" -- is reduced to entice buyers. The foreclosure has a gourmet kitchen, his and her pool cabanas, two guest suites and lovely gardens. "Priced to sell!" the listing says, and who wouldn't want to buy?

See the listing for more details.

Find homes for sale and for rent in your area.

See the listing for more details.

Find homes for sale and for rent in your area.

See the listing for more details.

Find homes for sale and for rent in your area.

Location: Leland, Mich.
Price: $4.75 million
Beds/baths: 7/6
Sq. ft.: 5,718

This prime lakefront property on Lake Michigan was built in 1996 and has three natural stone fireplaces, tougue-and-groove wood ceilings, as well as three wells on the property. Part of the lot may be available for development depending on local zoning laws.

See the listing for more details.

Find homes for sale and for rent in your area.

See the listing for more details.

Find homes for sale and for rent in your area.

See the listing for more details.

Find homes for sale and for rent in your area.

Location: Jupiter, Fla.
Price: $4.3 million
Beds/baths: 6/8
Sq. ft.: 9,153

You'd never guess that there would be a foreclosure in the same town as Celine Dion's famous manse, and one with an epic backyard water park. And from the looks of it, who would guess that this home would be said foreclosure? With grand archways, spiraling staircases and rooms awash in rich cherrywood, it is certainly not your typical foreclosure.

See the listing for more details.

Find homes for sale and for rent in your area.

See the listing for more details.

Find homes for sale and for rent in your area.

See the listing for more details.

Find homes for sale and for rent in your area.

Location: Monterey, Calif.
Price: $3.798 million
Beds/baths: 4/6
Sq. ft.: 6,266

The lawn may be a little bit overgrown, but this foreclosed California home can still be a dream come true with a little TLC. It has a large kitchen with wraparound granite countertops, a huge master suite and long, beautiful gallery walkways.

See the listing for more details.

Find homes for sale and for rent in your area.

See the listing for more details.

Find homes for sale and for rent in your area.

See the listing for more details.

Find homes for sale and for rent in your area.

Location: Las Vegas
Price: $3.55 million
Beds/baths: 5/8
Sq. ft.: 11,641

Las Vegas is one of the cities that was hit the hardest during the foreclosure crisis, but that doesn't mean that all its homes in foreclosure are dumps. This foreclosed mansion proves that: It has a grand entry foyer with sprawling marble floors, a modern-to-the-minute kitchen -- and even a theater!

See the listing for more details.

Find homes for sale and for rent in your area.

See the listing for more details.

Find homes for sale and for rent in your area.

See the listing for more details.

Find homes for sale and for rent in your area.

Location: Naples, Fla.
Price: $3.5 million
Beds/baths: 6/8
Sq. ft.: 8,355

The foreclosure crisis clearly didn't spare even the most exclusive of enclaves: This massive estate has private lake and golf course views, a four-car garage, soaring salon with fireplace and grand staircase, and even a private "in-law suite" in the eastern wing.

See the listing for more details.

Find homes for sale and for rent in your area.

See the listing for more details.

Find homes for sale and for rent in your area.

See the listing for more details.

Find homes for sale and for rent in your area.

Location: Greenwood Village, Colo.
Price: $3.3 million
Beds/baths: 6/9
Sq. ft.: 9,881

Still pretty new, this home sits on a 2.5-acre lot with beautiful mountain views. The good news is that, even though it's been foreclosed on, it should be in very good condition.

See the listing for more details.

Find homes for sale and for rent in your area.

See the listing for more details.

Find homes for sale and for rent in your area.

See the listing for more details.

Find homes for sale and for rent in your area.

Location: Henderson, Nev.
Price: $3.25 million
Beds/baths: 6/8
Sq. ft.: 12,872

This giant foreclosure has a massive kitchen, dual grand staircases, a backyard pool with fountain, and a gorgeous wine cellar.

See the listing for more details.

Find homes for sale and for rent in your area.

See the listing for more details.

Find homes for sale and for rent in your area.

See the listing for more details.

Find homes for sale and for rent in your area.

Location: Boulder City, Nev.
Price: $3 million
Beds/baths: 6/7
Sq. ft.: 9,245

You might recognize this palatial foreclosure: We wrote about it in August. But it's what's behind the home that is most memorable.

See the listing for more details.

Find homes for sale and for rent in your area.

There's an entire water park in the backyard, including a "lazy river," a water slide and a water mill.

See the listing for more details.


Find homes for sale and for rent in your area.

The interior of the home is equally impressive, with monstrous rooms and unique wood detailing.

See the listing for more details.

Find homes for sale and for rent in your area.

See the listing for more details.


Find homes for sale and for rent in your area.

of
SEE ALL
BACK TO SLIDE
SHOW CAPTION +
HIDE CAPTION

Follow us on Twitter at @AOLRealEstate or connect with AOL Real Estate on Facebook.
Read Full Story

Find a Home

Buy
Rent
Value
Powered by Zillow

People are Reading