Foreclosure Home Housing & Foreclosure Reports Q2 2012 U.S. Foreclosure Sales Report

Low Foreclosure Supply Pushes Sales Lower, Prices Higher

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Pre-Foreclosure and Bank-Owned (REO) Sales Both Down, Reflecting Low Supply
  Average Foreclosure Sales Price Increases Annually for First Time Since Q2 2010

IRVINE, Calif. – Aug. 30, 2012 — RealtyTrac® (www.realtytrac.com), the leading online marketplace for foreclosure properties, today released its Q2 2012 U.S. Foreclosure Sales Report™, which shows that sales of homes that were in some stage of foreclosure or bank-owned (REO) accounted for 23 percent of all U.S. residential sales during the second quarter — up from 22 percent of all sales in the first quarter and up from 19 percent of all sales in the second quarter of 2011.

High-level findings from the report:

  • Although foreclosure-related sales as a percentage of total sales increased, the raw number of foreclosure-related sales in the second quarter (224,429) decreased 12 percent from the previous quarter and was down 22 percent from the second quarter of 2011 — the first annual decrease in foreclosure-related sales after five quarters of increases.
  • The average foreclosure-related sales price in the second quarter ($170,040) increased 6 percent from the previous quarter and was up 7 percent from the second quarter of 2011 — the first annual increase in average price since Q2 2010 and the biggest annual increase since Q4 2006.
 
  • Homes in foreclosure or bank-owned sold at an average price that was 32 percent lower than the average price of a non-foreclosure home, up from a 30 percent discount in the first quarter and also a 30 percent discount in the second quarter of 2011.
  • The gap between bank-owned (REO) sales and pre-foreclosure (short) sales continued to shrink in the second quarter, with bank-owned sales outnumbering pre-foreclosure sales by 9,833, the smallest difference since the third quarter of 2007. Pre-foreclosure sales outnumbered bank-owned sales in 13 states and the District of Columbia.
  • As a supplement to the report, RealtyTrac analyzed nationwide short sale transactions occurring on properties not yet in the foreclosure process and found that those increased 18 percent on a year-over-year basis for the period of January through May. These non-foreclosure short sales accounted for 14 percent of all sales during this time period, a bigger percentage than either pre-foreclosure sales or bank-owned sales.   

“The second quarter sales numbers provide solid statistical evidence of what we’ve been hearing anecdotally from real estate agents, buyers and investors over the past few months: there is a limited supply of available foreclosure inventory to choose from in many markets,” said Daren Blomquist, RealtyTrac Vice President. “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.

“Three straight months of increasing foreclosure starts through July may ease the inventory shortage somewhat in the coming months when many of these foreclosure starts translate into listed short sales or bank-owned homes,” Blomquist added. “The increase in short sales of properties that have not even started the foreclosure process indicates that lenders are moving further upstream to deal with their distressed inventory, thereby avoiding the increasingly complex and lengthy foreclosure process altogether.”

Pre-foreclosure sales down from three-year high in first quarter
Third parties purchased a total of 107,298 pre-foreclosure homes — in default or scheduled for auction — during the second quarter, a decrease of 10 percent from the previous quarter and a decrease of 9 percent from the second quarter of 2011. Pre-foreclosure sales accounted for 11 percent of all sales during the second quarter, up from 10 percent of all sales in the previous quarter and 8 percent of all sales in the second quarter of 2011.

Despite the national decrease, pre-foreclosure sales increased on a year-over-year basis in 16 states, including Michigan (42 percent increase), Illinois (35 percent increase), Connecticut (27 percent increase) and Massachusetts (27 percent increase).

Pre-foreclosure homes, which are often sold via short sale, sold for an average price of $185,062 in the second quarter, up 5 percent from a record low for the RealtyTrac report in the previous quarter but still down 1 percent from the second quarter of 2011.

The average sales price of a pre-foreclosure home in the second quarter was 26 percent below the average price of a non-foreclosure home, up from a 24 percent discount in the first quarter and a 18 percent discount in the second quarter of 2011.

Pre-foreclosure homes that sold in the second quarter took an average of 319 days to sell after starting the foreclosure process, up from from an average of 306 days in the previous quarter and up from an average of 245 days in the second quarter of 2011.

REO sales decrease 31 percent from year ago, average prices rise 10 percent
Third parties purchased a total of 117,131 bank-owned (REO) homes in the second quarter, down 13 percent from the previous quarter and down 31 percent from the second quarter of 2011. REO sales accounted for 12 percent of all sales in the second quarter, the same percentage as in the first quarter but up from 11 percent of all sales in the second quarter of 2011.

REOs sold for an average price of $155,892 in the second quarter, up 6 percent from the first quarter and up 10 percent from the second quarter of 2011. The average sales price of a bank-owned home in the second quarter was 37 percent below the average sales price of a non-foreclosure home, the same percentage discount as in the first quarter but down slightly from a 38 percent discount in the second quarter of 2011.

REOs that sold in the second quarter took an average of 195 days to sell after completing the foreclosure process, up from 178 days in the first quarter and also 178 days in the second quarter of 2011.

Georgia, Nevada, California post highest percentage of foreclosure sales
Foreclosure sales accounted for 43 percent of all residential sales in both Georgia and Nevada in the second quarter, the two highest percentages among the states despite decreasing foreclosure-related sales activity in both states.

California foreclosure-related sales in the second quarter decreased 10 percent from a year ago, but still accounted for 40 percent of all residential sales in the state — the third highest percentage of any state. The average price of a foreclosure-related sale in California during the second quarter was $248,676, an increase of 4 percent from the previous quarter and also an increase of 4 percent from the second quarter of 2011.

Other states where foreclosure-related sales accounted for at least one in five sales in the second quarter were Michigan (35 percent), Arizona (33 percent), Illinois (27 percent), New Hampshire (24 percent), Colorado (22 percent), Wisconsin (22 percent), Minnesota (22 percent), Oregon (21 percent), and Florida (21 percent).

Metro Trends
Foreclosure-related sales accounted for 57 percent of all residential sales in Modesto, Calif., the highest percentage of any of the nation’s 100 largest metropolitan statistical areas in terms of population.

Six other California metro areas were in the top 10 in terms of percentage of foreclosure-related sales: Stockton (54 percent); Riverside-San Bernardino-Ontario (47 percent), Bakersfield (46 percent), Sacramento (45 percent), Fresno (44 percent), and Oxnard-Thousand Oaks-Ventura (39 percent).

Metro areas outside of California with percentage of foreclosure-related sales ranking among the top 10 were Las Vegas (45 percent), Atlanta (45 percent), and Detroit (39 percent).

Report methodology
 The RealtyTrac U.S. Foreclosure Sales Report is produced by matching national address-level arms-length sales deed data against RealtyTrac’s foreclosure database of pre-foreclosure (NOD, LIS), auction (NTS, NFS) and bank-owned (REO) properties. A property is considered a foreclosure sale if a sales deed is recorded for the property while it was actively in some stage of foreclosure or bank-owned. Previous quarterly numbers may be revised upon the issuance of a new quarterly foreclosure sales report because of new sales deed data received by RealtyTrac. The foreclosure discount is calculated by comparing the percentage difference between the average sales price of properties not in foreclosure to the average sales price of properties in some stage of foreclosure or bank-owned. States without sufficient foreclosure sales data to calculate average prices are not included in the report.

Glossary of Terms
Foreclosure (FC) sale: a sale of a property that occurs while the property is actively in some stage of foreclosure (NOD, LIS, NTS, NFS or REO). This includes only sales to third-party buyers or investors. It does not include property transfers from the owner in default to the foreclosing bank or lender.

REO sale: a sale of a property that occurs while the property is actively bank owned (REO).

Pre-foreclosure sale: a sale of a property that occurs while the property is actively in default (NOD, LIS) or scheduled for foreclosure auction (NTS, NFS).

Pct. of all sales: total number of Foreclosure Sales (or Pre-Foreclosure Sales or REO Sales) as a percentage of all residential sales during the quarter or year.

Avg. FC sales price: the average sales price of Foreclosure Sales (including both Pre-Foreclosure Sales and REO Sales) during the quarter or year, excluding sales with no sales price.

Avg. FC discount: the percentage difference between the average sales price of foreclosure sales and the average sales price of non-foreclosure sales during the quarter or year.

Avg. REO discount: the percentage difference between the average sales price of REO sales and the average sales price of non-foreclosure sales during the quarter or year.

Avg. pre-foreclosure discount: the percentage difference between the average sales price of pre-foreclosure sales and the average sales price of non-foreclosure sales during the quarter or year.

Report License
The RealtyTrac U.S. Foreclosure Sales Report is the result of a proprietary evaluation of information compiled by RealtyTrac; the report and any of the information in whole or in part can only be quoted, copied, published, re-published, distributed and/or re-distributed or used in any manner if the user specifically references RealtyTrac as the source for said report and/or any of the information set forth within the report.

Order Customized Reports
Detailed and historical foreclosure data used to create the above report may be purchased  through the RealtyTrac Data Licensing Department at 949.502.8300 Ext. 158. Aggregate data is available at the state, metro, county and zip code levels dating back to 2005, and address-level foreclosure records are also available historically.

About RealtyTrac Inc.                                                        
RealtyTrac (www.realtytrac.com) is the leading online marketplace of foreclosure properties, with more than 1.5 million default, auction and bank-owned listings from over 2,200 U.S. counties, along with detailed property, loan and home sales data. Hosting millions of unique monthly visitors, RealtyTrac provides innovative technology solutions and practical education resources to facilitate buying, selling and investing in real estate. RealtyTrac’s foreclosure data has also been used by the Federal Reserve, FBI, U.S. Senate Joint Economic Committee and Banking Committee, U.S. Treasury Department, and numerous state housing and banking departments, private companies and academic institutions to help evaluate foreclosure trends and address policy issues related to foreclosures.

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Media Contacts:

Jennifer von Pohlmann
949.502.8300, ext. 139
jennifer.vonpohlmann@realtytrac.com  

Ginny Walker
949.502.8300, ext. 268
ginny.walker@realtytrac.com

Order Custom Data:
Data Sales Department
800.913.0439
datasales@realtytrac.com



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