According to online foreclosure marketplace RealtyTrac, in the third quarter of this year, foreclosure sales volume is down 31% from Q3 2009 and down 25% from Q2 2010. Reports show that foreclosure homes now account for a quarter of all residential sales and are being deeply discounted.
The average sales price of properties in some state of foreclosure is $169,523 with the average discount rising 32% from the previous year, posting the biggest discount numbers since 2005. The average sales price for homes not in foreclosure was $249,721, up 4.36% over Q3 2009.
“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,” said RealtyTrac CEO, James Saccacio. “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.”
Saccacio noted, “The expiration of the homebuyer tax credit in the second quarter created a substantial dip in overall buyer demand in the third quarter.”
“We could expect probably in the fourth quarter to see that percentage of foreclosure sales dip because buyers are a bit skittish about purchasing foreclosure properties, given the questions surrounding the foreclosure process,” RealtyTrac spokesman, Daren Blomquist said.
RealtyTrac has already noted a dip in foreclosure activity in November, reaffirming Saccacio’s belief that the foreclosure processing debacle has impacted the sector which could lead to a further slowing of sales as the year closes.
According to RealtyTrac, their methodology: “The RealtyTrac U.S. Foreclosure Sales Report is produced by matching national address-level sales deed data against RealtyTrac’s foreclosure database of pre-foreclosure (NOD, LIS), auction (NTS, NFS) and bank-owned (REO) properties. A property is considered a foreclosure sale if a sales deed is recorded for the property while it was actively in some stage of foreclosure or bank-owned. The foreclosure discount is calculated by comparing the percentage difference between the average sales price of properties not in foreclosure to the average sales price of properties in some stage of foreclosure or bank-owned. States without sufficient foreclosure sales data to calculate average prices are not included in the report.”
AG is not affiliated with any company mentioned in this article.