Homes in the process of foreclosure accounted for 24 percent of all residential real estate sales in the second quarter, according to a new quarterly report by foreclosure data site RealtyTrac.
When a sales deed to a third-party buyer is recorded for a property while it is in some stage of foreclosure, the company counts the property as a foreclosure sale for the purposes of the quarterly U.S. Foreclosure Sales Report.
The report, which made its debut in the first quarter, matches sales deed data nationwide against RealtyTrac’s foreclosure database of properties that are in default, scheduled for auction, or bank-owned (REO). In the first quarter report, foreclosure sales made up 31 percent of all residential sales.
There were a total 248,534, foreclosure sales in the second quarter, down 20.2 percent compared to the same quarter in 2009 but up 4.9 percent compared to first-quarter 2010.
RealtyTrac’s CEO James J. Saccacio attributed the quarter-to-quarter rise to the expiration of the federal homebuyer tax credits. To qualify, homebuyers had until April 30 to sign a purchase contract for a property.
"While foreclosure sales increased in the second quarter, non-foreclosure sales increased even more, spurred on by the homebuyer tax credit that expired during the quarter," Saccacio said in a statement.
"That had the net effect of lowering foreclosure sales as a percentage of total sales during the quarter, but that may be a temporary dip as the removal of the tax credit could drive more buyers back to discounted short sales and REOs."
The average sale price of foreclosure properties in the second quarter was 26 percent lower than that for non-foreclosure properties. That discount is down slightly from 27 percent in the first quarter.
Most foreclosure sales in the second quarter were of bank-owned (REO) properties, which accounted for almost 15 percent of all residential sales in the second quarter, though that’s a decrease in share from 19 percent in the first quarter and 20 percent in last year’s second quarter.
At 151,290, such sales represented a 3 percent increase from the first quarter, but a 28 percent drop from the second quarter of 2009. The average discount for REO sales was 34.5 percent, about the same as in the first quarter, and slightly lower than the discount for the second quarter of 2009 (35 percent).
A total of 97,244 properties that were either in default or scheduled for auction sold last quarter — an 8 percent quarter-to-quarter increase, though a 3 percent year-over-year decrease. Their share of sales fell quarter-to-quarter, to 9 percent from nearly 12 percent, but remained flat compared to 2009’s second quarter.
The discount for these preforeclosure sales, which are often short sales, seems to be falling. Buyers got a 13 percent average discount in the second quarter, down from 14.8 percent in the first quarter and 19 percent in last year’s second quarter.
Nevada, Arizona, and California posted the highest percentages of foreclosure sales in the country in the second quarter. Despite quarter-to-quarter and year-over-year decreases in foreclosure sales, Nevada posted the highest share of such sales, at 55.7 percent.
REO sales dropped 14 percent quarter-to-quarter and 43 percent year-over-year, while preforeclosure sales climbed 29 percent quarter-to-quarter and 2 percent year-over-year.
Arizona claimed the second-highest share, with 47 percent of all sales involving properties in some state of foreclosure. Preforeclosure sales also rose in Arizona, up 9 percent quarter-to-quarter and 15 percent year-over-year, and REO sales jumped 15 percent quarter-to-quarter while falling almost 34 percent year-over-year.
California’s foreclosure sales rate was 43 percent. Preforeclosure sales were up close to 8 percent quarter-to-quarter in that state but down 4 percent year-over-year, while REO sales rose 1 percent quarter-to-quarter and plunged 45 percent year-over-year.
In the latest figures from the National Association of Realtors, distressed properties made up 34 percent of nationwide existing-home sales in August, up from 32 percent in July and 31 percent in August 2009.
Top 10 states with the highest foreclosure sale rates
1. Nevada: 56 percent
2. Arizona: 47 percent
3. California: 43 percent
4. Rhode Island: 37 percent
5. Massachusetts: 35 percent
6. Florida: 34 percent
7. Michigan: 33 percent
8. Georgia: 27 percent
9. Idaho: 27 percent
10. Oregon: 25 percent
Top 10 states (including Washington, D.C.) with the highest foreclosure discounts
1. Ohio: 42.6 percent
2. Kentucky: 40.8 percent
3. California: 39.3 percent
4. Michigan: 38.9 percent
5. Tennessee: 38.3 percent
6. Pennsylvania: 38.2 percent
7. Georgia: 37.7 percent
8. Illinois: 37 percent
9. Iowa: 36.3 percent
10. Washington, D.C.: 36 percent