Last week RealtyTrac released an analysis of what profiles of homes offer the best potential for discount, and which markets have the most properties matching those hot discount profiles.
The analysis ranked 24 property profiles based on their potential discount both nationwide and by state. The profiles were constructed using different combinations of four variables: foreclosure status, equity status (negative or positive), vacancy status, and year built. The analysis looked at the average amount each profile sold below market value based on millions of sales deeds recorded in the last 12 months.
Although there were similarities in the profiles from state to state, there were also notable differences. For example, homesin default, with negative equity, vacant and built after 1990 sold at an average 12.2 percent discount below market value in California, but that same profile sold for an 18.4 percent premium above market value in Florida. The biggest discount potential in Florida, meanwhile, is on homes scheduled for auction, negative equity, vacant with an effective year built between 1950 and 1990.
Use the interactive visual below to see the potential discounts available for the 24 different property profiles in each state and to compare states. Just click on the “Select State” drop down to select different states than are displayed by default.
The common theme nationwide was that properties in the earliest stages of foreclosure, either scheduled for foreclosure auction or in default, offered the best potential discount — based on RealtyTrac’s analysis of sales data on millions of U.S. properties over the past 12 months. In most of the top five property profiles offering the biggest potential discount, the foreclosure distress was paired with another form of distress, or multiple forms of distress such as negative equity, vacancy and older property.
A surprising finding from this analysis is that bank-owned homes nationwide and in many states are not selling at much, if any, discount. To the contrary, they are often selling at a premium. Nationwide, overall bank-owned homes — regardless of vacancy status or year built — sold at an average premium of 2.5 percent, while bank-owned properties built before 1950 sold at an average premium of 6.7 percent.
Bank-owned properties did sell at a discount in some states, however, notably some Rust Belt states such as Michigan, where bank-owned homes overall sold at an average 12.6 percent discount, and Ohio, where they sold at an average 17.6 percent discount.
Here’s a heat map showing which markets — at the county level — had the
highest share of properties matching the top five discount profiles for
that state, as a percentage of all foreclosures. Click on any county to
see the number of properties matching the top five discount profiles
along with other relevant information about the housing market in that