Short and foreclosure sales on the rise
RealtyTrac's quarterly report on the foreclosure industry showed that more than a fourth of all domestic property sales during the first quarter of the year were bargains on foreclosure properties. Excessive foreclosures bring down the cost of houses, making market recover more difficult. The news, regarded with last week’s grim jobs report, further supports the conclusion that the slow financial recovery is not picking up much steam at the moment. Article resource: Foreclosures are a quarter of all U.S. home sales
Home foreclosures an appealing choice
About 26 percent of all houses were foreclosures in the first quarter of 2012 sales, according to the quarterly Foreclosure Sales Report. That is four percent higher than it was a year ago and one percent higher than it was last quarter.
The average price of the foreclosure homes decreased 1 percent from the previous quarter and 2 percent from the first quarter of 2011 to $161,214.
Losing with short sales
Brandon Moore is RealtyTrac’s chief executive officer. He explained that more owners are attempting to stay away from getting repossessed and are doing pre-foreclosure sales in the process:
"Foreclosure-related sales picked up in the first quarter, particularly pre-foreclosure sales where a distressed homeowner is selling to avoid foreclosure -- typically via short sale. Those pre-foreclosure sales hit a three-year high in the first quarter, even as the average pre-foreclosure sales price dropped to a record low for our report."
The average price of pre-foreclosure homes was $175,461 in the first three months of 2012. A year ago, that was 10 percent higher. In the last quarter of 2011, it was 4 percent more.
The number of pre-foreclosure sales went up by 25 percent from a year prior, and up by 16 percent from the fourth quarter of 2011.
Bottleneck of REO inventory
The report added that the cost of bank-owned houses is leveling off, and the sales of Real Estate Owned, or REO, homes were up in 21 states. REO homes are those that did not sell at auction and have been legally repossessed. The sales increase suggests that there is a backlog of REO houses to sell in many regions.
The states with the most foreclosure sales as a percentage of all home sales included Nevada at 56 percent, 47 percent in California and 46 percent in GA.