RealtyTrac: Distressed Sales Make Up 43% of Home Sales in 2012

Foreclosure-related sales are on the decline but distressed sales continue to claim a ""disproportionately high portion"" of total home sales across the country, according to ""RealtyTrac's"":http://www.realtytrac.com/ most recent foreclosure and short sales ""report."":http://www.realtytrac.com/content/foreclosure-market-report/us-foreclosure-and-short-sales-report-year-end-and-q4-2012-7609 The firm also found increases in prices for distressed properties in 2012.

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Distressed property sales made up 43 percent of all home sales nationwide in 2012, according to RealtyTrac. Foreclosure-related sales made up 21 percent of all sales, while non-foreclosure short sales made up 22 percent of sales.

Together, foreclosure and REO sales decreased 6 percent from 2011 with a total of 947,995 sales over the year in 2012.

""Although foreclosure-related sales represent a shrinking share of total sales, primarily because of fewer bank-owned purchases, distressed sales are still a disproportionately high portion of the overall housing market,"" said Daren Blomquist, VP at RealtyTrac.

Prices for properties in foreclosure or REO increased 4 percent year-over-year in the fourth quarter of 2012 and demonstrated a 2 percent rise from the third quarter. The average price for these properties in the fourth quarter was $171,704, according to RealtyTrac.

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Blomquist pointed out distressed properties ""are still selling at a significant discount compared to non-distressed properties."" However, ""distressed property prices are increasing in many markets thanks to strong demand and limited inventory,"" he said.

The average price for a pre-foreclosure property in the fourth quarter was $191,031, representing a 2 percent increase year-over-year. However, this remains 23 percent below the average price for a non-foreclosure property.

REO sales came at an average price of $151,998 in the fourth quarter of 2012, up 3 percent from the fourth quarter of 2011.

However, the average price for an REO is 39 percent below the average for non-foreclosure properties.

The share of REO sales declined for the year in 2012. Eleven percent of all home sales in 2012 involved REO properties, a decrease from the 13 percent share recorded for the year in 2011.

However, REO sales increased in 26 states. The highest increases were recorded in Illinois (19 percent), Pennsylvania (12 percent), and Massachusetts (12 percent).

Non-foreclosure short sales increased in each quarter of the year, ending the year with a 2 percent quarterly increase and a 17 percent yearly increase from Q4 2011.

In three states--Michigan, Florida, and Nevada--non-foreclosure short sales made up about one-third of all sales in those states, the highest share recorded compared to other states.

California claimed the highest percentage of foreclosure sales of any state, with about 38 percent of sales over the year falling into the category. However, while claiming the highest rate, California's foreclosure sale share was still down from 2011 when 44 percent of all sales involved foreclosed properties.