Houses In The Foreclosure Process Make Up 25% Of First-Quarter House Sales
NEW YORK: Houses in one stage of foreclosure or another accounted for over one in four house sales during 2012′s first-quarter, according to a report released by RealtyTrac on May 31.
Depressed properties, which were either in default, owned by the bank, or scheduled to be auctioned made up 25 percent of all residential house sales. This percentage is up 22 percent from the fourth-quarter in 2011, and 25 percent one year prior, according to the report.
In total, 233,299 properties in distress were bought over the quarter, which was an 8 percent increase from 2011′s fourth-quarter. The average home sold for $161,214, which is 27 percent below average prices for houses not in the foreclosure process.
Chief executive of RealtyTrac, Brandon Moore, said that sales related to foreclosures picked up during the first-quarter, in particular, pre-foreclosure sales, where homeowners sell in order to avoid being foreclosed upon – generally by way of a short sale.
There were almost 110,000 short-sales during the first-quarter, which is up 25 percent from last year, and comprised 12 percent of all houses sold in the first-quarter, according to RealtyTrac’s report.
With short sales, home owners who owe more money on their mortgage than what their home is worth, make an agreement with the bank to sell their house for less than market value, while the bank agrees to eat the loss.
Over the course of the first-quarter, short sale houses on average sold for $175,461, the lowest amount since RealtyTrac started tracking houses in foreclosure seven years ago.
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