Homes in foreclosure represented 31 percent of all residential sales in the first quarter of 2010, with the average foreclosure priced at 27 percent below the average price of non-distressed properties, according real estate data firm RealtyTrac.
A total of 232,959 U.S. properties in some phase of foreclosure — default, scheduled for auction or bank-owned (REO) — sold to third parties in the first quarter, a decrease of 14 percent from the previous quarter.
Foreclosure sales were down 33 percent from the peak in the first quarter of 2009, when foreclosure homes represented 37 percent of all residential sales.
“First-time homebuyers and investors continue to buy foreclosure properties in large numbers, and at substantial discounts,” said James J. Saccacio, chief executive officer of RealtyTrac. “As lenders have begun repossessing homes at record levels over the first half of 2010, it will be interesting to watch how they will manage the inventory levels of distressed properties on the market in order to prevent more dramatic price deterioration.”
The average sales prices on properties in some stage of foreclosure declined 23 percent from 2006 to 2009, while the average discounts on foreclosure purchases steadily increased from 21 percent in 2006 to 27 percent in the first quarter of 2010.
Discounts on REOs are larger than discounts on pre-foreclosures, although discounts on pre-foreclosures appear to be trending higher as short sales become more common, RealtyTrac said.
