RealtyTrac, the online firm which tracks distressed real estate throughout the U.S., is reporting that sales of foreclosed homes made up a significantly smaller percentage of real estate sales in the third quarter of 2011 from both the prior quarter and the year before.
Sales of real estate that was in some part of the foreclosure process, from having received a notice of default through to being owned by a lender, were only 20% of real estate sales in the third quarter of 2011. This was 11% below the revised figure for the second quarter of 2011 and 5% below the percentage in the third quarter of 2010.
Sales of foreclosed have been made up a large percentage of the real estate market for months as investors and new home buyers moved in to capitalize on foreclosed property's lower prices, experts have said.
“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. 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,” said Brandon Moore, CEO of RealtyTrac.
“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,” Moore said.
“Even with the hurdles to selling foreclosures, foreclosure sales continue to represent a historically high percentage of all sales,” he added, noting that in 2005 and 2006, foreclosure sales consistently accounted for less than 5% of all sales nationwide.