By Mike Colpitts
Foreclosures or bank owned homes sold at an average discount of 32% below similar homes in the same neighborhood during the second quarter of the year, according to RealtyTrac. The price was two percent lower than a year ago.
Foreclosure sales accounted for 23% of all U.S. residential sales during the second quarter, a single 1% hike from the first quarter. There were 224,429 foreclosure related sales during the period, which was 22% down from a year ago.
The RealtyTrac study also showed that the majority of foreclosures are in lower price ranges, with the average price of foreclosed homes being $170,040.
The gap between bank owned homes and short sales, in which lenders cooperate to sell homes at less than what is owed on the property shrank in the second quarter, with bank owned homes out-selling foreclosures by 9,833.
“There is a limited supply of available foreclosure inventory to choose from in many markets,” said RealtyTrac vice president Daren Bloomquist. “Given this shortage of supply and the seasonally strong buyer demand in the second quarter, it’s no surprise that the average foreclosure related sales price increased both on a quarterly and annual basis.
Pre-foreclosures sales, most of which are short sales were made on 107,298 homes during the second quarter, a 10% decline from the previous quarter. The sales represented 11% of transactions during the period.
Despite the decline across the country, pre-foreclosure sales increased on a year-over-year basis in 16 states, including hard hit Michigan, Illinois and Connecticut. Bank owned home sales fell 31% from a year ago, but average prices paid for homes sold directly by lenders increased 10% as 117,131 REOs sold during the period.