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Buyers of distressed properties in third quarter reaped largest discount in five years

According to a report released by RealtyTrac, foreclosure homes accounted for 25 percent of all U.S. residential sales in the third quarter of 2010 and that the average sales price of properties that sold while in some stage of foreclosure was more than 32 percent below the average sales price of properties not in the foreclosure process — up from a 26 percent discount in the previous quarter and a 29 percent discount in the third quarter of 2009.

Highlights from the RealtyTrac Foreclosure Report for third quarter 2010:

  • 188,748 U.S. properties in some stage of foreclosure, default, scheduled for auction or bank-owned (REO) sold to third parties in the third quarter. This is down 25 percent from the previous quarter and down almost 31 percent from a year ago.
  • The average sales price of those distressed properties sold was $169,523, down 2.46 percent from the previous quarter and down 0.44 percent from a year ago. The average sales price of properties not in foreclosure was $249,721, up 6.42 percent from the previous quarter and up 4.36 percent from a year ago.
  • Sales volume of non-foreclosure properties decreased 29 percent from the previous quarter and nearly 31 percent from a year ago.
  • Buyers that purchased a short sale or REO during the quarter were able to get an average discount of more than 32 percent — the highest average foreclosure discount reported since the fourth quarter of 2005.

Foreclosure sales by type:

  • 60 Percent of the distressed sales in third quarter were Bank-Owned (REO) properties sold to third parties, down nearly 26 percent from the previous quarter and down nearly 35 percent from a year ago.
  • REOs sold for an average discount of nearly 41 percent, up from an average discount of 34 percent in the previous quarter and an average discount of nearly 35 percent in the third quarter of 2009.
  • 40 percent of the distressed sales in third quarter were pre-foreclosure properties, in default or scheduled for auction, sold to third parties in the third quarter, down nearly 24 percent from the previous quarter and down 24 percent from a year ago.
  • Pre-foreclosure sales, which are often short sales, sold for an average discount of 19 percent, up from an average discount of nearly 13 percent in the previous quarter and an average discount of 18 percent a year ago.

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                  Q3 2010 Total Foreclosure (FC) Sales
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State       # of FC %Change %Change Pct. of  Avg. FC Avg. FC   Avg.    Avg.
             Sales  from Q2 from Q3   All     Sales    Dis-    REO    Pre-FC
                      2010    2009   Sales    Price   count%   Dis-    Dis-
                                                              count%  count%
U.S. Total  188,748  -25.07  -30.83   24.89 $169,523   32.12   40.53   19.44
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Alabama         606  -39.64  -13.55   13.75 $142,577   22.27   25.26    3.33
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Alaska          118  -51.84  -35.52    7.44 $224,034   17.02   14.36   22.94
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Arizona      14,343  -27.35  -32.46   46.54 $138,525   25.03   31.98   15.03
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Arkansas        521  -47.53  -47.74   12.76 $128,368   20.60   25.21   11.75
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California   45,825  -26.79  -43.48   39.68 $251,756   38.56   45.87   28.90
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Colorado      4,079  -26.02  -19.51   23.19 $184,582   30.83   34.83   23.36
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Delaware        275  -14.33   -9.84   14.14 $171,983   33.97   37.50   24.87
----------------------------------------------------------------------------
District of
Columbia        126  -16.00  -37.00    7.11 $292,648   39.56   48.12   30.41
----------------------------------------------------------------------------
Florida      34,186  -13.34   -7.65   36.75 $120,030   28.23   37.96   19.74
----------------------------------------------------------------------------
Georgia       6,340  -27.13  -35.46   29.36 $116,086   40.22   44.97   32.72
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Hawaii          404  -24.06  -27.86   12.29 $353,540   25.51   28.89   21.08
----------------------------------------------------------------------------
Idaho         1,439  -35.47    6.36   25.24 $154,983   15.10   21.27   10.67
----------------------------------------------------------------------------
Illinois      6,844  -24.34  -23.96   24.74 $142,214   41.34   49.91   20.90
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Indiana       2,427  -33.20  -40.06   17.56 $112,544   27.53   31.86   17.87
----------------------------------------------------------------------------
Iowa            420  -23.77  -13.76    5.71  $96,861   33.56   38.17   -0.20
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Kentucky        926  -24.22   -0.22   14.93  $95,208   44.31   50.79   30.96
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Louisiana       534  -29.18  -18.60   10.07 $135,784   28.34   33.89   16.42
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Maryland      2,338  -47.57  -16.97   16.95 $207,544   35.86   41.70   32.19
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Massa-
chusetts        499  -65.18  -75.24   34.90 $181,088   25.34   25.90   25.21
----------------------------------------------------------------------------
Michigan      9,587  -25.55  -26.78   31.75  $72,266   40.52   44.24   21.26
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Minnesota     1,721  -26.45  -40.45   12.18 $147,711   31.20   34.88   21.73
----------------------------------------------------------------------------
Missouri      2,669  -23.41  -23.92   16.36 $113,297   28.94   28.87   29.23
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Montana         144  -23.81   53.19    6.70 $197,005    5.32   12.37  -14.33
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Nevada        8,917  -15.07  -35.47   53.88 $135,221   19.01   22.16   14.22
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New
Hampshire       127  -65.58  -73.98    7.74 $166,129   33.42   38.46   29.90
----------------------------------------------------------------------------
New Jersey    2,487  -30.39  -32.10   12.66 $219,758   41.19   52.60   30.46
----------------------------------------------------------------------------
New Mexico      426  -17.76   17.68    8.62 $176,572   15.47   13.83   16.96
----------------------------------------------------------------------------
New York      2,147  -20.25  -34.28    7.22 $287,352   29.50   53.81   16.66
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North
Carolina      2,329  -26.81  -28.14   11.85 $147,522   28.20   31.23   17.86
----------------------------------------------------------------------------
Ohio          6,117  -26.85  -24.78   21.67  $79,695   44.54   50.66   20.54
----------------------------------------------------------------------------
Oklahoma        604  -37.15  -39.66   10.25  $96,377   35.61   36.04   34.92
----------------------------------------------------------------------------
Oregon        2,381  -27.41  -14.69   26.59 $183,905   28.26   32.32   19.75
----------------------------------------------------------------------------
Penn-
sylvania      2,876  -11.15   -5.02   11.53 $123,249   40.35   47.44   22.74
----------------------------------------------------------------------------
South
Carolina      1,918  -25.97   -8.45   19.44 $143,673   27.08   32.13    8.58
----------------------------------------------------------------------------
Tennessee     3,215  -29.97  -35.21   18.77  $95,512   42.25   43.44   28.47
----------------------------------------------------------------------------
Texas         8,087  -27.85  -25.18   11.85 $146,858   26.69   28.07   23.03
----------------------------------------------------------------------------
Utah          1,905  -29.83  -20.99   20.31 $214,472    2.92    7.11   -7.32
----------------------------------------------------------------------------
Virginia      4,147  -28.18  -30.96   23.33 $229,933   33.86   38.56   25.08
----------------------------------------------------------------------------
Washington    2,513  -24.65  -35.58   14.08 $237,084   25.59   29.93   16.99
----------------------------------------------------------------------------
Wisconsin     1,254  -31.36  -45.29   13.60 $112,528   37.13   45.09   25.05
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SOURCE: RealtyTrac

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