Foreclosures, Distressed Properties, Still Make Up Large Part of Sales
Real estate that is in some stage of the foreclosure process or is already owned by financial institutions made up 31% of property sales in the second quarter of this year, down from making up 36% of sales in the first quarter but up from being 24% of sales in the second quarter of last year.
The data comes from RealtyTrac, a leading market for foreclosed and distressed real estate.
The large slug of distressed and foreclosed properties continued to drive down prices, the firm said. The average price of a foreclosed property in the second quarter was $164,217, down 1% from the average price in the first quarter and 5% less than the average price in the second quarter of last year.
These average prices were 32% lower than prices for real estate that is not in foreclosure, the firm added.
But RealtyTrac CEO, James Saccacio, saw good news in the numbers, pointing out they indicate that the market is starting to deal with the foreclosure stockpile.
“With average prices on distressed real estate trending down and average discounts trending up, this report is clearly good news for well-positioned buyers and investors looking for bargain real estate that will build them wealth in the long term and often cash flow as rental real estate in the short term,” said Saccacio.“Maybe less evident, however, is the good news in this report for distressed homeowners looking to sell, and even lenders saddled with large portfolios of delinquent loans.”