The amount of bank-owned properties and properties on the verge of being repossessed dropped by 5 percentage points from the first quarter to the second quarter, falling from 36%to 31%, according to a report released by foreclosure data provider RealtyTrac.
Also of interest is the fact that distressed properties are selling at a larger discount these days, RealtyTrac reported:
- The average sales price of a bank-owned (also known as real estate owned or REO) home was $145,211 in the second quarter, which was about 40 percent below the average sales price of a nonforeclosure home. That compares with a 36 percent discount in first-quarter 2011 and a 34 percent discount in second-quarter 2010.
- The average sales price of a preforeclosure home (preforeclosures, which are homes in default or scheduled for sale at public auction, are often sold in a short-sale process) was $192,129 in the second quarter, which is 21 percent below the average sales price of a nonforeclosure home. That compares with a 17 percent discount in first-quarter 2011 and a 14 percent discount in second-quarter 2010.
There were 162,680 sales of bank-owned homes to third parties in the second quarter, RealtyTrac also reported, roughly flat compared with the 162,900 reported in the first quarter and down 10 percent from second-quarter 2010. REO sales accounted for 19 percent of home sales in the second quarter, compared with 23 percent in the first quarter and 15 percent in second-quarter 2010.
There were 102,407 sales of preforeclosure homes to third parties in the second quarter of this year, up 19 percent from the first quarter but down 12 percent compared to second-quarter 2010. These sales accounted for 12 percent of sales in the second quarter of this year, flat with the first quarter and up 10 percent compared to second-quarter 2010.
The jump in preforeclosure sales volume, coupled with bigger discounts on preforeclosures and a shorter average time to sell preforeclosures, all point to a housing market that is starting to focus on more efficiently clearing distressed inventory through more streamlined short sales, at least in some areas. James Saccacio, RealtyTrac CEO.
“This gives distressed homeowners who do not qualify for loan modification or refinancing, or who are not interested in those options and want to sell,a better chance of completing a short sale to avoid foreclosure.” Expedited short sales, he added, “also give lenders the opportunity to more pre-emptively purge nonperforming loans from their portfolios,” and avoid a lengthy foreclosure and REO process.
Among those metro areas with at least 100 foreclosure-related sales in the second quarter, Louisville, Ky., had the largest average foreclosure discount, 54% below the average sales price of nonforeclosure homes. Florida’s Sebastian-Vero Beach metro area was second on the list with an average foreclosure discount of 53%, followed by Milwaukee (51%), Pittsburgh (51%), and Kalamazoo, Mich. (50$), RealtyTrac reported.
Before leaving you with some statistics, i’ll just add that i personally believe short sales is the solution to limiting the number of foreclosures in the market. Plus it is a win-win deal for both buyers and lenders. Let me know what you think about it.
Top 10 States with Largest Volume of Foreclosure Sales in Q2 2011
| California | 69,897 |
| Florida | 34,558 |
| Arizona | 25,756 |
| Nevada | 15,685 |
| Michigan | 11,668 |
| Texas | 11,517 |
| Georgia | 10,485 |
| Illinois | 9,355 |
| Colorado | 8,044 |
| Ohio | 6,868 |
Top 10 States with Largest Share of Foreclosure Sales in Q2 2011 (as a percentage of total sales)
| Nevada | 65.43% |
| Arizona | 56.64% |
| California | 51.31% |
| Michigan | 40.61% |
| Georgia | 38.42% |
| Colorado | 35.90% |
| Florida | 35.06% |
| Illinois | 34.01% |
| Oregon | 33.41% |
| Idaho | 29.59% |
| Utah | 26.85% |
Top 10 States with Highest Average REO Discount
| New Jersey | 53.53% |
| New York | 52.99% |
| Kentucky | 51.58% |
| Illinois | 49.89% |
| California | 49.64% |
| Ohio | 49.04% |
| Maryland | 48.48% |
| Wisconsin | 46.69% |
| Michigan | 45.95% |
| Virginia | 45.38% |
Top 10 States with Highest Average Preforeclosure Discount
| Missouri | 43.19% |
| Tennessee | 39.24% |
| Mississippi | 39.22% |
| Indiana | 36.93% |
| Maryland | 36.11% |
| California | 35.95% |
| Texas | 35.03% |
| Delaware | 33.84% |
| Georgia | 33.03% |
| Kentucky | 32.76% |
9 States with Rise in Share of Foreclosure Sales (Q2 2010-Q2 2011)
| Wyoming | 96.63% |
| Nevada | 30.71% |
| Montana | 25.59% |
| Delaware | 24.93% |
| Washington | 22.61% |
| Iowa | 21.13% |
| Arizona | 16.07% |
| Colorado | 5.23% |
| Hawaii | 4.21% |
Top 10 States with Largest Decline in Share of Foreclosure Sales (Q2 2010-Q2 2011)
| New Hampshire | -50.38% |
| Indiana | -48.76% |
| Maine | -47.40% |
| New Jersey | -46.42% |
| New York | -42.65% |
| Nebraska | -42.33% |
| Mississippi | -41.76% |
| Utah | -34.79% |
| North Carolina | -32.11% |
| Kentucky | -30.82% |
Source: Inmannews.com
