Foreclosures Accounted for 31% of Q1 Home Sales: RealtyTrac

""RealtyTrac"":http://www.realtytrac.com released a new industry report Tuesday, which shows that homes already foreclosed or somewhere in the process accounted for 31 percent of all residential[IMAGE]

sales in the first quarter of 2010. The company also found that the average sales price of properties in some stage of foreclosure was nearly 27 percent below the average sales price of non-distressed properties.

A total of 232,959 U.S. properties in some stage of foreclosure - default, scheduled for auction, or bank-owned (REO) - sold to third parties in Q1, according to the real estate tracking firm. That's a decrease of 14 percent from the previous quarter and down 33 percent from the first quarter of 2009, when sales of foreclosure homes peaked at 37 percent of all residential sales.

To put the magnitude of the nation's foreclosure crisis into perspective, RealtyTrac trailed back to the height of the most recent boom, the years that put the downturn into motion. From 2005 to 2009, the company says foreclosure sales increased a staggering 2,500 percent.

During the first quarter of this year, a total of 144,503 REO properties sold to third parties, accounting for 19 percent of all sales. REOs sold for an average discount of 34 percent.

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Pre-foreclosure or short sales â€" including those in default and scheduled for auction â€" tallied 88,456, and sold for an average discount of nearly 15 percent. Pre-foreclosure short sales made up 12 percent of all sales activity last quarter. During the previous three-month period, they were 10 percent of total sales.

""First time homebuyers and investors continue to buy foreclosure properties in large numbers, and at substantial discounts,"" said James J. Saccacio, RealtyTrac's CEO. ""As lenders have begun repossessing homes at record levels over the first half of 2010, it will be interesting to watch how they will manage the inventory levels of distressed properties on the market in order to prevent more dramatic price deterioration.""

RealtyTrac's study shows that Nevada, California, and Arizona claimed the highest percentage of foreclosure sales in Q1.

In Nevada, 64 percent of all sales last quarter were foreclosures. Although the figure gives Nevada the top spot on the state list, it's actually down from 65 percent in the previous quarter and 75 percent a year ago.

California's foreclosure sales accounted for 51 percent of activity in Q1, while Arizona's grabbed a 50 percent share.

Other states where foreclosures made up at least one-third of all sales were Massachusetts, Rhode Island, Florida, Michigan, Georgia, Illinois, Idaho, and Oregon.

Ohio, Kentucky, and Illinois posted the highest foreclosure discounts, with sales prices 39 percent below those of non-distressed properties.

The average overall foreclosure discount was at least 35 percent in California, Tennessee, Pennsylvania, D.C., and New Jersey.

The biggest discount on REO properties was found in New York, at 52 percent. Rhode Island claimed the largest short sale discount, at 33 percent.