31% of Home Sales in Q1 Were Foreclosures

Thirty-one percent of all residential properties sold in the first quarter of 2010 were foreclosure properties, according to data released Tuesday by Foreclosure Deals, an online resource of foreclosure listings from across the country.

 

Experts at the Miami-based company believe the statistic shows that people are continuing to turn to the foreclosure market as a plentiful source of low cost homes.

 

With 232,950 foreclosure homes sold during the first quarter of this year, that total is down slightly from the final quarter of 2009, and 33 percent below the total foreclosure homes sold in the first quarter of 2009, Foreclosure Deals reported.

 

The decline in total sales could be an indication of a shrinking market, but falling prices over the same period show that foreclosure homes can still be purchased at prices far below the national average.

 

According to Foreclosure Deals, the price of a foreclosure during the first quarter was 27 percent below the average sale price of a traditional home sale. That’s up from an average discount of 21 percent in 2006.

 

“Buyers are attracted to foreclosures because they offer tremendous discounts,” said James Foxx, a business analyst with Foreclosure Deals. “The numbers show that each year, the total number of foreclosures sold has increased, and that’s not just a reflection of supply. They’re very popular, and for good reason, there’s no better investment value in real estate currently out there.”

 

According to industry statistics provided by Foreclosure Deals, foreclosure home sales did increase by 25 percent from 2008 to 2009, and over 320 percent since 2007.

 

During the first quarter of this year, the company found that foreclosures accounted for more than 50 percent of home sales in California, Nevada, and Arizona.

 

Foreclosure homes accounted for at least 33 percent of all sales in Michigan, Massachusetts, Florida, Georgia, and Illinois.

 

Foreclosure Deals says REO properties accounted for 19 percent of all residential sales during Q1, with an average market value discount of 34 percent. Pre-foreclosure or short sales accounted for 12 percent.

 

Ohio had the highest average discount on a foreclosed home in the first quarter, at 39.5 percent below market value. Close behind were Kentucky and Illinois at 39 percent, and California and Tennessee at 37 percent.

 

“The statistics show that buyers and investors are getting some great deals,” Foxx said. “And you don’t have to buy in the really tough markets, like Las Vegas, Nevada or Phoenix, Arizona to find them.”

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