Foreclosed Properties Selling at Even Steeper Discounts
And distressed properties are selling at a larger discount these days, RealtyTrac reported:
- The average sales price of a bank-owned (also known as real estate owned or REO) home was $145,211 in the second quarter, which was about 40 percent below the average sales price of a non-foreclosure home. That compares with a 36 percent discount in first-quarter 2011 and a 34 percent discount in second-quarter 2010.
- The average sales price of a pre-foreclosure home (pre-foreclosures, which are homes in default or scheduled for sale at public auction, are often sold in a short-sale process) was $192,129 in the second quarter, which is 21 percent below the average sales price of a non-foreclosure home. That compares with a 17 percent discount in first-quarter 2011 and a 14 percent discount in second-quarter 2010.
See the top 10 states with the most foreclosure sales.
There were 102,407 sales of preforeclosure homes to third parties in the second quarter of this year, up 19 percent from the first quarter but down 12 percent compared to second-quarter 2010. These sales accounted for 12 percent of sales in the second quarter of this year, flat with the first quarter and up 10 percent compared to second-quarter 2010.
The jump in pre-foreclosure sales volume, coupled with bigger discounts on pre-foreclosures and a shorter average time to sell pre-foreclosures, all point to a housing market that is starting to focus on more efficiently clearing distressed inventory through more streamlined short sales -- at least in some areas," said James Saccacio, RealtyTrac CEO, in a statement.
"This gives distressed homeowners who do not qualify for loan modification or refinancing -- or who are not interested in those options and want to sell -- a better chance of completing a short sale to avoid foreclosure." Expedited short sales, he added, "also give lenders the opportunity to more pre-emptively purge non-performing loans from their portfolios," and avoid a lengthy foreclosure and REO process.
See the top 10 states with the biggest foreclosure discounts.
Among those metro areas with at least 100 foreclosure-related sales in the second quarter, Louisville, Ky., had the largest average foreclosure discount -- 54 percent below the average sales price of non-foreclosure homes. Florida's Sebastian-Vero Beach metro area was second on the list with an average foreclosure discount of 53 percent, followed by Milwaukee (51 percent), Pittsburgh (51 percent), and Kalamazoo, Mich. (50 percent), RealtyTrac reported.
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