The third quarter of 2011 delivered 30 percent fewer foreclosure sales compared to the same time a year earlier and 22 percent fewer from only one quarter earlier, according to a report from an online marketplace for foreclosures.
RealtyTrac reported that homes in some stage of foreclosure accounted for 20 percent of the residential sales according to its Q3 2011 U.S. Foreclosure Sales Report.
“While foreclosures continue to represent an excellent bargain-buying opportunity for many buyers and investors, foreclosure sales accounted for a smaller share of the total market in the third quarter,” said Brandon Moore, chief executive officer of RealtyTrac. “That trend is not too surprising given the continued ambiguity surrounding proper foreclosure procedures — and the ripple effect that has on sales of foreclosed properties that might have been improperly foreclosed. The sooner the market gets more clarity about accepted foreclosure procedures, primarily through the long-promised settlement between multiple states attorneys general and major lenders, the sooner the market can more efficiently dispose of these distressed properties.”
Even with the hurdles to selling foreclosures, foreclosure sales continue to represent a historically high percentage of all sales, according to Moore. In 2005 and 2006, foreclosure sales consistently accounted for less than 5 percent of all sales nationwide.
A total of 92,824 pre-foreclosure homes — in default or scheduled for auction — sold to third parties in the third quarter, a decrease of 9 percent from the previous quarter and nearly identical to the third quarter of 2010. Pre-foreclosure sales accounted for nearly 9 percent of all sales.
Pre-foreclosure sales increased more than 30 percent on an annual basis in Michigan (up 68 percent), North Carolina (up 44 percent), Ohio (up 43 percent) and Georgia (up 35 percent). Pre-foreclosure sales outnumbered REO sales in several states in the third quarter, including Colorado, Florida, New Jersey and New York.
Pre-foreclosures that sold in the third quarter took an average of 318 days to sell after receiving an initial foreclosure notice, up from an average of 245 days in the second quarter and average of 236 days in the third quarter of 2010.
A total of 128,712 bank-owned (REO) homes sold to third parties in the third quarter, down 13 percent from the second quarter and down nearly 8 percent from the third quarter of 2010. REO sales accounted for nearly 12 percent of all sales in the third quarter, down from 13 percent of all sales in the previous quarter and down from nearly 18 percent of all sales in the third quarter of 2010.
State stats
Foreclosure-related sales accounted for nearly 57 percent of all residential sales in Nevada during the third quarter, the highest percentage of any state. Third parties purchased a total of 13,992 homes in foreclosure or bank owned in Nevada during the third quarter, nearly identical to the 13,858 foreclosure-related sales in the previous quarter, but up 24 percent from the third quarter of 2010.
Third parties purchased a total of 62,583 homes in foreclosure or bank owned in California, representing nearly 44 percent of the state’s total residential property sales in the third quarter — the second highest percentage of any state. Foreclosure-related sales in California decreased nearly 7 percent from the previous quarter but were up 7 percent from the third quarter of 2010.
Arizona foreclosure-related sales accounted for 43 percent of all sales in the state, the third highest percentage of any state. Third parties purchased a total of 21,619 homes in foreclosure or bank owned in Arizona during the quarter, down nearly 14 percent from the previous quarter, but up 19 percent from the third quarter of 2010.
Other states where foreclosure-related sales accounted for at least 20 percent of all sales included Georgia (34 percent), Colorado (26 percent) and Michigan (23 percent).
Due to a nearly 30 percent decrease from the previous year, Florida foreclosure-related sales in the third quarter accounted for 19 percent of all sales in the state — down from 39 percent of all sales in the third quarter of 2010.