by Broderick Perkins
(10/1/2010) ERATE Exclusive - Nearly one in four homes sold in the second quarter this year were in some state of foreclosure and, on average, sold more than 26 percent below the average sales price of properties not in foreclosure.
A new RealtyTrac study says nationwide, 248,534 foreclosure properties -- defaults, auction scheduled or bank-owned (REO) -- sold in the second quarter, an increase of nearly 5 percent from the previous quarter, but down 20 percent from the second quarter of 2009.
Foreclosure sales increased from the first to second quarter, but non-foreclosure sales increased even more, due to the now expired homebuyer tax credit, according to James J. Saccacio, chief executive officer of RealtyTrac.
The non-foreclosure sales jump was temporary as recent sales reveal the tax credit's demise is driving more buyers back to the bargains in short sales and REOs.
Discounts, sales by state
Ohio foreclosures sold with the nation's deepest discounts, an average of nearly 43 percent in the second quarter. Pre-foreclosures in the Buckeye State sold for an average discount of nearly 24 percent while the average discount on Ohio REOs was nearly 48 percent.
With foreclosures selling at an average price that was 41 percent below the average sales price of non-foreclosure properties, Kentucky posted the nation's second deepest discount. Pre-foreclosures sold for an average discount of 27 percent, and Bluegrass State REOs sold for an average discount of 48 percent.
In the Golden State foreclosures sold for an average discount of 39 percent, the third-deepest discount statewide. California pre-foreclosures sold for an average discount of 29 percent and California REOs sold for an average discount of 46 percent.
Other states with average foreclosure discounts of more than 35 percent were Michigan, Tennessee, Pennsylvania, Georgia, Illinois and Iowa, along with the District of Columbia.
Foreclosure sales accounted for nearly 56 percent of all sales in Nevada in the second quarter, the highest percentage of any state, followed by Arizona (47 percent), California (43 percent), Rhode Island (37 percent), Massachusetts (35 percent), Florida (34 percent), and Michigan (33 percent).
Nearly 15 percent of all home sales, 151,290 bank-owned (REO) properties sold to third parties in the second quarter, down 28 percent from the second quarter of 2009. REOs sold for an average discount of nearly 35 percent, nearly unchanged from a year ago.
A total of 97,244 pre-foreclosure properties (in default or scheduled for auction) sold in the second quarter, down 3 percent from the second quarter of 2009. Pre-foreclosure sales accounted for 9 percent of all sales, unchanged from the second quarter of 2009.
Pre-foreclosure sales, which are often short sales, sold for an average discount of nearly 13 percent, down from an average discount of 19 percent in the second quarter of 2009.
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