RealtyTrac, the online marketplace for foreclosure properties, released its Q1 2012 U.S. Foreclosure Sales Report, which shows that sales of homes that were in some stage of foreclosure or bank owned accounted for 26 percent of all U.S. residential sales during the first quarter, up from 22 percent of all sales in the fourth quarter and up from 25 percent of all sales in the first quarter of 2011.
Third parties purchased a total of 233,299 residential properties in some stage of pre-foreclosure (defaults and scheduled foreclosure auctions) or bank-owned (REO) during the first quarter, an increase of 8 percent from the previous quarter and virtually unchanged from the first quarter of 2011.
The average sales price of homes in foreclosure or bank owned was $161,214 in the first quarter, down 1 percent from the previous quarter and down 2 percent from the first quarter of 2011. That average sales price was 27 percent below the average sales price of homes not in foreclosure or bank-owned during the quarter, matching a 27 percent foreclosure discount in the previous quarter but down from a 29 percent foreclosure discount in the first quarter of 2011.
“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,” said Brandon Moore, chief executive officer of RealtyTrac. “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. Lenders are approving more aggressively priced short sales, which in turn is resulting in more successful short sale transactions.
“Meanwhile the average price of a bank-owned home is stabilizing and even increasing in some areas where a slowdown in REO activity over the past year has resulted in a restricted supply of REO homes available,” Moore continued. “Still, REO sales did increase on a quarterly basis in 21 states, indicating that lenders are still working through a bottleneck of unsold REO inventory in many areas.”
Short sales boost
Third parties purchased a total of 109,521 pre-foreclosure homes, in default or scheduled for auction, during the first quarter, an increase of 16 percent from the previous quarter and an increase of 25 percent from the first quarter of 2011. First quarter pre-foreclosure sales were at their highest quarterly level since the first quarter of 2009. Pre-foreclosure sales accounted for 12 percent of all sales during the first quarter, up from 10 percent of all sales in the previous quarter and 9 percent of all sales in the first quarter of 2011.
Pre-foreclosure sales increased on an annual basis in 27 states, including Wisconsin (94 percent), Michigan (81 percent), Georgia (80 percent), Texas (46 percent) and Illinois (46 percent).
Pre-foreclosure homes, which are often sold via short sale, sold for an average price of $175,461 in the first quarter, down 4 percent from the previous quarter and down 10 percent from the first quarter of 2011. The average pre-foreclosure sales price in the first quarter was the lowest quarterly average pre-foreclosure sales price in the history of the RealtyTrac foreclosure sales report, which tracks foreclosure sales back to the first quarter of 2005.
The average sales price of a pre-foreclosure home in the first quarter was 21 percent below the average price of a non-foreclosure home, up from a 19 percent discount in the fourth quarter and a 16 percent discount in the first quarter of 2011.
Pre-foreclosure homes that sold in the first quarter took an average of 306 days to sell after starting the foreclosure process, down from an average of 308 days in the previous quarter but still up from an average of 256 days in the first quarter of 2011.
Bank-owned stats
Third parties purchased a total of 123,778 bank-owned (REO) homes in the first quarter, up 2 percent from the previous quarter but down 15 percent from the first quarter of 2011. REO sales accounted for 14 percent of all sales in the first quarter, up from 13 percent of all sales in the previous quarter but down from 15 percent of all sales in the first quarter of 2011.
Twenty-one states posted a quarterly increase in REO sales, including Oregon (41 percent), North Carolina (23 percent), Ohio (21 percent), Florida (13 percent) and Wisconsin (13 percent).
REOs sold for an average price of $147,995 in the first quarter, down less than 1 percent from the previous quarter and up 2 percent from the first quarter of 2011. The average sales price of a bank-owned home in the first quarter was 33 percent below the average sales price of a non-foreclosure home, down from a 34 percent discount in the fourth quarter and a 37 percent discount in the first quarter of 2011.
REOs that sold in the first quarter took an average of 178 days to sell after completing the foreclosure process, up from 175 days in the fourth quarter and 176 days in the first quarter of 2011.
Foreclosure sales accounted for 56 percent of all residential sales in Nevada in the first quarter, the highest percentage of any state. The average price of a foreclosure-related sale in Nevada during the first quarter was $116,695, nearly identical to the average price in the previous quarter but down 5 percent from the first quarter of 2011.
California foreclosure-related sales accounted for 47 percent of the state’s total residential property sales in the first quarter, the second-highest percentage among the states. The average price of a foreclosure-related sale in California was $235,042 during the first quarter, an increase of less than 1 percent from the previous quarter and down 4 percent from the first quarter of 2011.
Foreclosure sales accounted for 46 percent of all residential sales in Georgia during the first quarter, the third highest percentage of any state. The average price of a foreclosure-related sale in Georgia during the first quarter was $103,909, down 3 percent from the previous quarter and down 10 percent from the first quarter of 2011.
Other states where foreclosure-related sales accounted for at least one in four sales in the first quarter were Arizona (40 percent), Michigan (39 percent), Illinois (31 percent), Colorado (30 percent), Wisconsin (28 percent), Oregon (27 percent), Minnesota (27 percent), Washington (26 percent) and New Hampshire (26 percent).
Among the nation’s 20 largest metropolitan statistical areas, those with the biggest annual increases in pre-foreclosure sales were Atlanta (78 percent), Detroit (75 percent), San Antonio (74 percent), Sacramento (70 percent) and Dallas (69 percent).
Metro areas with the biggest annual increases in REO sales were Minneapolis (33 percent), Boston (30 percent), Philadelphia (22 percent), Atlanta (15 percent) and Chicago (13 percent).