Foreclosure-Related Deals, ‘Short Sales’ Account for 43% of All Home Sales


Foreclosure-Related Deals, 'Short Sales' Account for 43% of All Home SalesClose to half of all home sales last year were in some way related to foreclosed properties or short sales, a figure still disproportionately high — but at least shrinking compared to the previous two years.

A total of 947,995 U.S. properties in some stage of foreclosure or bank-owned (REO) were sold during the year, a decrease of 6 percent from 2011 and down 11 percent from 2010, reported RealtyTrac today.

Foreclosure-related sales and “short sales,” when homes are sold for less than what is owed, accounted for a combined 43 percent of all U.S. residential sales in 2012.

A total of 947,995 U.S. properties in some stage of foreclosure, or bank-owned (REO), were sold during the year, a decrease of 6 percent from 2011 and down 11 percent from 2010.

These foreclosure-related sales accounted for 21 percent of all U.S. residential sales during the year, down from 23 percent of all sales in 2011, and down from 28 percent of all sales in 2010.

Properties not in foreclosure that sold as short sales in 2012 accounted for an estimated 22 percent of all residential sales — bringing the total share of distressed sales to 43 percent,  including both foreclosure-related sales and non-foreclosure short sales.

In the fourth quarter of 2012, residential properties in foreclosure or bank-owned sold for an average price of $171,704, an increase of 2 percent from the third quarter and an increase of 4 percent from the fourth quarter of 2011.

“Although foreclosure-related sales represent a shrinking share of total sales, primarily because of fewer bank-owned purchases, distressed sales are still a disproportionately high portion of the overall housing market,” said Daren Blomquist, vice president of RealtyTrac.

Distressed properties — whether bank-owned, pre-foreclosure or short sales not in foreclosure — are still selling at a significant discount compared to non-distressed properties, Blomquist said.

But average distressed property prices are increasing in many markets due to strong demand and limited inventory.

Properties not in foreclosure that sold as short sales in 2012 accounted for an estimated 22 percent of all residential sales — bringing the total share of distressed sales to 43 percent including both foreclosure-related sales and non-foreclosure short sales.

Other findings from RealtyTrac’s year-end report:

  • U.S. pre-foreclosure sales in 2012 increased 6 percent from the previous year, while sales of bank-owned homes (REO) decreased 15 percent.
  • Pre-foreclosure sales in 2012 increased from the previous year in 28 states and outnumbered REO sales in 12 states, including Arizona, California, Colorado, Florida, Maryland, New Jersey and New York.
  • Despite the decrease nationwide, REO sales in 2012 increased from the previous year in 26 states and still outnumbered pre-foreclosure sales in 38 states, including Georgia, Illinois, Indiana, Massachusetts, Michigan, Minnesota and Nevada.
  • Non-foreclosure short sales in 2012 sold short of the loan amount by an average of $81,621, down from an average of $87,809 short in 2011.
  • Non-foreclosure short sales accelerated toward the end of the year, with the fourth quarter total the highest quarterly total of the year and up 17 percent from the fourth quarter of 2011.

Foreclosure-Related Deals, 'Short Sales' Account for 43% of All Home Sales


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