Foreclosure homes accounted for 25% of all residential sales in the third quarter ended Sept. 30 and the average sales price of properties sold in some stage of foreclosure was more than 32% below the average sales price of properties not in the foreclosure process.
The numbers are up from a 26% discount in the previous quarter and a 29% discount in the third quarter of 2009, according to RealtyTrac, an online marketplace for foreclosure properties. RealtyTrac released its Q3 2010 U.S. Foreclosure Sales Report on Thursday.
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 homebuyer tax credit in the second quarter created a substantial dip in overall buyer demand in the third quarter,” says James J. Saccacio, chief executive officer at 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 says. “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.”
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.
