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Foreclosures, Short Sales Decline in Q1

Over the last year, sales for distressed properties showed steep declines amid a backdrop of slower foreclosure activity and rising prices, according ""RealtyTrac's foreclosure and short sale report"":http://www.realtytrac.com/Content/foreclosure-market-report/us-foreclosure-sales-and-short-sales-report-q1-2013-7732.


During the first three months of this year, 190,121 properties that were in some stage of foreclosure or bank-owned were sold. The first quarter total represents a quarterly and yearly decrease of 18 percent and 22 percent, respectively.

At the same time, the share of foreclosure-related sales represented 21 percent of all sales in Q1, down from 25 percent a year ago. At its peak in Q1 2009, foreclosure-related sales accounted for 45 percent of all sales. According to RealtyTrac, Georgia led as the state with the largest share of foreclosure-related sales in Q1, at 35 percent.

In addition, the share of properties that were not in foreclosure but sold as a short sale fell to 15 percent, down 10 percent from Q4 2012 and down 35 percent from a year ago. However, in Rhode Island, Connecticut, and Massachusetts, the share of non-foreclosure short sales ranged between 40 and 44 percent.


""We expected foreclosure-related sales to be lower given the downward trend in new foreclosure activity nationwide over the past two and a half years, but the decrease in non-foreclosure short sales was a bit of surprise given the 11 million homeowners nationwide still underwater,"" said Daren Blomquist, VP at RealtyTrac.

Though, in some markets, Blomquist explained rising home prices could be the reason for the slowdown in short sales.

""Underwater homeowners may be willing to stick it out a few more months or even years in the hope that they will be able to walk away with money at the closing table and without a hit to their credit rating, and for lenders a failed short sale may no longer translate into bigger losses down the road given that average prices of bank-owned homes are rising - at a faster pace than non-distressed home prices in many markets,"" he added.

In the first quarter, the average price for properties in foreclosure rose 3 percent from the year before to $167,095. Compared to the previous quarter, the price is 1 percent lower. Meanwhile, short sales sold for an average price of $178,392, up 5 percent Q1 2012, but down 4 percent from Q4 2012.

While the average price of a foreclosure-related sale experienced more subtle changes on a national level, RealtyTrac found certain markets saw dramatic annual price gains. In San Jose, the average price of foreclosure-related sales surged 30 percent compared to a year ago. Other markets where foreclosure sales prices climbed included Dayton, Ohio, (+27 percent), Phoenix (+26 percent), Las Vegas (+23 percent), and Sacramento (+21 percent).

About Author: Esther Cho


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