RISMEDIA, December 3, 2010—RealtyTrac, a leading online marketplace for foreclosure properties released its Q3 2010 U.S. Foreclosure Sales Report, which shows that foreclosure homes accounted for 25% of all U.S. residential sales in the third quarter of 2010 and that the average sales price of properties that sold while in some stage of foreclosure was more than 32% below the average sales price of properties not in the foreclosure process—up from a 26% discount in the previous quarter and a 29% discount in the third quarter of 2009.
A total of 188,748 U.S. properties in some stage of foreclosure—default, scheduled for auction or bank-owned (REO)—sold to third parties in the third quarter, a decrease of 25% from the previous quarter and a decrease of nearly 31% from the third quarter of 2009. The average sales price of properties in some stage of foreclosure was $169,523, down 2.46% from the previous quarter and down 0.44% from the third quarter of 2009.
The average sales price of properties not in foreclosure was $249,721, up 6.42% from the previous quarter and up 4.36% from the third quarter of 2009. Sales volume of non-foreclosure properties decreased 29% from the previous quarter and nearly 31% from the third quarter of 2009.
“The expiration of the home buyer tax credit in the second quarter created a substantial dip in overall buyer demand in the third quarter,” said James J. Saccacio, chief executive officer of RealtyTrac. “Demand for foreclosures also dipped in the third quarter, but those who did purchase a short sale or REO during the quarter were able to get an average discount of more than 32%—the highest average foreclosure discount we’ve seen since the fourth quarter of 2005.
“The foreclosure-processing controversy, which was brought to light at the very end of the third quarter, could chill demand even further—particularly for foreclosure properties,” Saccacio continued. “A quick but responsible resolution to that issue would be ideal to help the market continue to properly clear out foreclosure inventory and get distressed properties into the hands of qualified buyers and investors who will likely add value to those properties and the neighborhoods they are in.”
Foreclosure sales by type
A total of 113,933 bank-owned (REO) properties sold to third parties in the third quarter, down nearly 26% from the previous quarter and down nearly 35% from the third quarter of 2009. REO sales accounted for 15% of all sales in the third quarter, the same as the previous quarter and slightly below the 16% of all sales reported in the third quarter of 2009. REOs sold for an average discount of nearly 41%, up from an average discount of 34% in the previous quarter and an average discount of nearly 35% in the third quarter of 2009.
A total of 74,815 pre-foreclosure properties—in default or scheduled for auction—sold to third parties in the third quarter, down nearly 24% from the previous quarter and down 24% from the third quarter of 2009. Pre-foreclosure sales accounted for nearly 10% of all sales, up slightly from 9% in the previous quarter and 9% in the third quarter of 2009. Pre-foreclosure sales, which are often short sales, sold for an average discount of 19%, up from an average discount of nearly 13% in the previous quarter and an average discount of 18% in the third quarter of 2009.
Nevada, Arizona, California post highest percentage of foreclosure sales
Foreclosure sales accounted for nearly 54% of all sales in Nevada in the third quarter, the highest percentage of any state, but down from nearly 56% of all sales in the previous quarter and 62% of all sales in the third quarter of 2009. Both pre-foreclosure sales and REO sales in Nevada were down from the previous quarter and from the third quarter of 2009. Nevada properties in some stage of foreclosure sold for an average discount of 19% in the third quarter.
Arizona foreclosure sales accounted for nearly 47% of all sales in the third quarter, the second highest percentage of any state despite a decrease of 27% from the previous quarter and a decrease of 32% from the third quarter of 2009. Arizona properties in some stage of foreclosure sold for an average discount of 25% in the third quarter.
Foreclosure sales accounted for nearly 40% of all sales in California in the third quarter, the third highest percentage nationwide, but down from 43% of all sales in the previous quarter and nearly 52% of all sales in the third quarter of 2009. California foreclosure sales were down nearly 27% from the previous quarter and down 43% from the third quarter of 2009. California properties in some stage of foreclosure sold for an average discount of nearly 39% percent.
Other states where foreclosure sales accounted for at least one-quarter of all sales were Florida (37%), Massachusetts (35%), Michigan (32%), Georgia (29%), Oregon (27%), Idaho (25%) and Illinois (25%).
Ohio, Kentucky, Tennessee post highest foreclosure discounts
Ohio foreclosures sold for an average discount of nearly 45% in the third quarter, the biggest discount percentage of any state and up from an average discount of 42% in the previous quarter. Ohio pre-foreclosures sold for an average discount of nearly 21%, and Ohio REOs sold for an average discount of nearly 51%.
With foreclosures selling at an average price that was 44% below the average sales price of non-foreclosure properties, Kentucky posted the nation’s second highest average foreclosure discount in the third quarter. Kentucky pre-foreclosures sold for an average discount of nearly 31%, and Kentucky REOs sold for an average discount of nearly 51%.
Tennessee foreclosures sold for an average discount of 42% in the third quarter, the third highest average discount nationwide and up from an average discount of nearly 38% in the previous quarter. Tennessee pre-foreclosures sold for an average discount of 28%, and Tennessee REOs sold for an average discount of 43%.
Other states with average foreclosure discounts of more than 40% were Illinois, New Jersey, Michigan, Pennsylvania and Georgia.
For more information, visit www.RealtyTrac.com.
