Industry News

Study probes residential real estate foreclosures

Reveals link between percentage of foreclosure sales and discounts

A new study that investigates the prevalence of foreclosure sales and the depth of discounts in 629 counties in 36 states was released last week by First American Real Estate Solutions, a provider of property and ownership information, analytics and services. The study, "Residential Foreclosures: The Prevalence, the Power and the Opportunity," written by Christopher Cagan, Ph.D., director of research and analytics at First American Real Estate Solutions, quantifies the correlation between foreclosures as a percentage of total sales and the size of the discount buyers typically receive when purchasing foreclosure properties. For example, in Maricopa County, Ariz., where foreclosure sales accounted for 1.6 percent of total sales during the first half of 2005, the median discount was 6.3 percent. Whereas in St. Louis, Mo., foreclosures made up 7.9 percent of sales for the same time period, with a median discount of 29.5 percent. "The prevalence of foreclosures and the depth o...