SOURCE: RealtyTrac

RealtyTrac

February 24, 2011 00:00 ET

Foreclosure Homes Account for 26 Percent of All 2010 Residential Sales According to RealtyTrac® Sales Report

Q4 Foreclosure Sales Volume Down Despite 21 Percent Jump in December; 28 Percent Average Discount on Foreclosure Purchases in 2010

IRVINE, CA--(Marketwire - February 24, 2011) - RealtyTrac® (www.realtytrac.com), the leading online marketplace for foreclosure properties, today released its Year-End and Q4 2010 U.S. Foreclosure Sales Report™, which shows that foreclosure homes accounted for nearly 26 percent of all U.S. residential sales during the year, down from 29 percent of all sales in 2009 but up from 23 percent of all sales in 2008. The report also shows that the average sales price of these foreclosure properties was more than 28 percent below the average sales price of properties not in the foreclosure process -- up from a 27 percent average discount in 2009 and a 22 percent average discount in 2008.

A total of 831,574 U.S. residential properties either owned by banks or in some stage of foreclosure -- default or scheduled for auction -- sold to third parties in 2010, a decrease of 31 percent from 2009 and a decrease of nearly 14 percent from 2008. Meanwhile sales volume of non-foreclosure properties in 2010 decreased nearly 19 percent from 2009 and nearly 27 percent from 2008.

A total of 149,303 foreclosure sales were recorded in the fourth quarter, down 22 percent from the previous quarter and down 45 percent from the fourth quarter of 2009 -- despite a 21 percent monthly uptick in foreclosure sales volume in December. Mirroring the year-end statistics, foreclosure sales in the fourth quarter accounted for 26 percent of total sales, and foreclosure properties sold for an average sales price that was 28 percent below the average sales price of properties not in foreclosure.

"Foreclosure sales in the fourth quarter faced the twin headwinds of the expired homebuyer tax credit -- which began to stifle sales volume during the third quarter -- and the foreclosure documentation controversy, which hit in the fourth quarter and temporarily froze sales of foreclosures from several major lenders," said James J. Saccacio, chief executive officer of RealtyTrac. "Given those factors, it's not surprising that in the fourth quarter foreclosure sales volume hit its lowest level since the first quarter of 2008.

"Still, foreclosures continue to represent a substantial percentage of all U.S. residential sales and continue to sell at an average sales price that is significantly below the average sales price of properties not in foreclosure -- the result of a bloated supply of foreclosures and weak demand from homebuyers," Saccacio continued. "The catch-22 for 2011 is that while accelerating foreclosure sales will help clear the oversupply of distressed properties and return balance to the market in the long run, in the short term a high percentage of foreclosure sales will continue to weigh down home prices."

Foreclosure sales by type
A total of 512,886 bank-owned (REO) properties sold to third parties in 2010 -- down nearly 32 percent from 2009 -- at an average discount of 36 percent, up from an average discount of 33 percent in 2009. REO sales accounted for 16 percent of all sales in 2010, down from nearly 18 percent of all sales in 2009 but still higher than the 13 percent of all sales they accounted for in 2008.

In the fourth quarter, a total of 95,683 REO properties sold to third parties, down 17 percent from the third quarter and down 43 percent from the fourth quarter of 2009. Fourth quarter REO sales accounted for nearly 17 percent of all sales during the quarter at an average discount of nearly 37 percent.

A total of 318,688 pre-foreclosure properties -- in default or scheduled for auction -- sold to third parties in 2010, down nearly 30 percent from 2009. Pre-foreclosure properties in 2010 sold at an average discount of 15 percent, down from an average discount of nearly 17 percent in 2009. Pre-foreclosure sales accounted for nearly 10 percent of all sales in 2010, down from nearly 11 percent of all sales in 2009 and virtually the same percentage of sales as in 2008.

In the fourth quarter, a total of 53,620 pre-foreclosure properties sold to third parties, down 29 percent from the previous quarter and down 49 percent from the fourth quarter of 2009. Fourth quarter pre-foreclosure sales accounted for nearly 10 percent of all sales during the quarter at an average discount of nearly 13 percent.

Nevada, Arizona, California post highest percentage of foreclosure sales in 2010
Foreclosure sales accounted for 57 percent of all residential sales in Nevada in 2010, the highest percentage of any state, but still down from a peak of 67 percent of all sales in 2009. Fourth quarter foreclosure sales accounted for nearly 59 percent of all sales in the state, up from nearly 54 percent in the third quarter.

Arizona foreclosure sales accounted for 49 percent of all sales in 2010, the second highest of any state but down from a peak of 54 percent in 2009. Fourth quarter foreclosure sales accounted for 55 percent of all sales in the state, up from 46 percent in the third quarter.

California foreclosure sales accounted for 44 percent of all sales in 2010, the third highest of any state but also down from a peak of 57 percent in 2009. Fourth quarter foreclosure sales in California accounted for 45 percent of all sales, up from 40 percent in the third quarter.

Other states where foreclosure sales accounted for at least one-quarter of all sales in 2010 were Florida (36 percent), Michigan (33 percent), Georgia (29 percent), Idaho (28 percent), Oregon (28 percent), Illinois (26 percent), Virginia (25 percent), and Colorado (25 percent).

10 states post foreclosure discounts of more than 35 percent in 2010
Ohio foreclosures sold for an average discount of nearly 43 percent in 2010, down from an average discount of nearly 47 percent in 2009, but still the highest of any state. Kentucky foreclosures sold for an average discount of more than 40 percent in 2010, the second highest of any state and up from nearly 38 percent in 2009.

Eight other states posted average foreclosure sale discounts of 35 percent or more in 2010: Tennessee, California, Pennsylvania, Illinois, New Jersey, Michigan, Georgia and Wisconsin.

Report methodology
The RealtyTrac U.S. Foreclosure Sales Report is produced by matching national address-level arms-length sales deed data against RealtyTrac's foreclosure database of pre-foreclosure (NOD, LIS), auction (NTS, NFS) and bank-owned (REO) properties. A property is considered a foreclosure sale if a sales deed is recorded for the property while it was actively in some stage of foreclosure or bank-owned. The foreclosure discount is calculated by comparing the percentage difference between the average sales price of properties not in foreclosure to the average sales price of properties in some stage of foreclosure or bank-owned. States without sufficient foreclosure sales data to calculate average prices are not included in the report.

Glossary of Terms
Foreclosure (FC) sale: a sale of a property that occurs while the property is actively in some stage of foreclosure (NOD, LIS, NTS, NFS or REO). This includes only sales to third-party buyers or investors not involved in the foreclosure process. It does not include property transfers from the owner in default to the foreclosing bank or lender.

REO sale: a sale of a property that occurs while the property is actively bank owned (REO).

Pre-foreclosure sale: a sale of a property that occurs while the property is actively in default (NOD, LIS) or scheduled for foreclosure auction (NTS, NFS).

Pct. of all sales: total number of Foreclosure Sales (or Pre-Foreclosure Sales or REO Sales) as a percentage of all residential sales during the quarter or year.

Avg. FC sales price: the average sales price of Foreclosure Sales (or Pre-Foreclosure Sales or REO Sales) during the quarter or year, excluding sales with no sales price.

Avg. FC discount: the percentage difference between the average sales price of foreclosure sales and the average sales price of non-foreclosure sales during the quarter or year.

Avg. REO discount: the percentage difference between the average sales price of REO sales and the average sales price of non-foreclosure sales during the quarter or year.

Avg. pre-foreclosure discount: the percentage difference between the average sales price of pre-foreclosure sales and the average sales price of non-foreclosure sales during the quarter or year.

   2010 Total Foreclosure (FC) Sales        
State   # of FC Sales   % Change from 2009   % Change from 2008   Pct. of All Sales   Avg. FC Sales Price   Avg. FC Discount %   Avg. REO Discount %   Avg. Pre-FC Discount %
U.S. Total   831,574   -31.14   -13.76   25.96   $172,030   28.13   36.30   15.06
Alabama   3,425   11.82   80.55   15.88   $140,157   19.49   20.97   11.17
Alaska   702   -17.99   2.33   10.42   $226,403   15.28   17.51   10.89
Arizona   65,461   -29.36   29.94   49.17   $138,321   25.26   31.32   15.61
Arkansas   2,859   -34.19   -21.39   15.08   $121,482   20.03   23.19   14.47
California   211,839   -41.58   -29.73   44.47   $251,693   39.31   46.11   29.21
Colorado   17,410   -25.39   -40.70   24.67   $186,046   28.25   32.14   20.47
Delaware   1,142   -6.93   29.19   13.92   $170,273   33.27   36.00   25.87
Florida   133,623   -7.85   83.25   36.20   $120,976   28.61   38.13   20.57
Georgia   27,657   -41.19   -36.09   29.38   $119,940   37.20   41.62   28.54
Hawaii   1,670   11.33   232.01   11.06   $380,661   14.32   23.77   7.93
Idaho   6,882   28.49   205.87   28.42   $159,362   11.26   17.90   7.54
Illinois   29,194   -21.47   6.01   26.34   $138,395   38.63   46.29   19.21
Indiana   11,669   -39.66   -34.12   19.27   $108,705   26.91   29.40   21.06
Iowa   1,733   -18.41   -20.61   5.15   $97,820   32.44   34.69   19.42
Kentucky   3,795   -0.63   25.04   13.66   $94,268   40.48   46.61   28.30
Louisiana   2,524   -4.36   31.05   9.70   $131,574   25.15   29.30   16.19
Maryland   12,706   -17.70   22.73   17.93   $209,789   30.41   34.15   28.11
Michigan   40,901   -34.96   -32.16   32.99   $73,771   37.66   41.07   20.05
Minnesota   7,171   -33.89   25.78   12.40   $148,225   25.65   29.06   16.59
Missouri   11,485   -33.77   -39.48   17.18   $114,419   24.73   23.55   28.92
Montana   684   39.88   79.53   7.85   $208,272   -3.08   -0.80   -11.43
Nevada   37,655   -39.15   -9.26   57.43   $135,921   18.49   21.71   12.53
New Hampshire   1,138   -56.94   -41.88   12.18   $172,199   28.42   34.59   24.67
New Jersey   11,312   -21.36   -9.91   15.18   $220,717   37.87   50.46   25.27
New Mexico   1,547   -0.77   26.49   8.03   $177,520   10.43   5.35   15.24
New York   9,454   -30.79   -33.35   7.69   $281,810   23.17   50.14   7.53
North Carolina   10,315   -29.06   -39.24   11.69   $146,261   25.85   28.63   16.07
Ohio   26,594   -38.16   -48.81   22.51   $79,835   42.76   48.13   23.12
Oklahoma   2,967   -32.52   -37.79   10.26   $96,314   32.09   36.03   26.98
Oregon   10,488   -9.64   71.71   28.17   $190,335   24.60   28.45   16.44
Pennsylvania   11,067   -14.40   -4.20   11.28   $120,767   39.07   46.08   21.15
South Carolina   8,496   -10.10   19.18   18.09   $145,307   21.45   27.35   -0.21
Tennessee   14,656   -33.96   -29.33   18.81   $96,501   39.49   40.90   26.68
Texas   37,316   -24.50   -22.72   12.88   $142,049   27.15   28.86   22.38
Utah   8,067   -19.48   42.10   19.71   $213,848   0.22   2.73   -5.50
Virginia   18,188   -30.94   -22.51   24.83   $228,564   30.39   34.05   23.82
Washington   11,217   -31.04   1.75   14.39   $232,314   24.53   29.08   14.45
Wisconsin   6,095   -31.06   -6.68   13.86   $108,610   35.36   42.19   22.37
   Q4 2010 Total Foreclosure (FC) Sales        
State   # of FC Sales   % Change from Q3 2010 (r)   % Change from Q4 2009 (r)   Pct. of All Sales   Avg. FC Sales Price   Avg. FC Discount %   Avg. REO Discount %   Avg. Pre-FC Discount %
U.S. Total   149,303   -22.01   -45.35   26.48   $173,747   28.25   36.91   12.77
Alabama   764   16.11   -8.50   19.80   $136,538   21.90   24.68   -0.39
Alaska   155   30.25   -38.25   10.90   $239,328   10.29   13.35   5.27
Arizona   13,871   -3.57   -33.19   55.13   $135,650   26.04   33.31   11.05
Arkansas   554   4.92   -45.90   17.84   $116,913   27.68   32.58   17.21
California   43,097   -6.20   -43.37   45.48   $251,142   39.20   46.15   28.28
Colorado   3,141   -23.26   -43.09   25.99   $179,013   32.71   37.32   21.80
Delaware   205   -36.73   -28.07   12.67   $170,877   35.56   39.50   24.20
Florida   23,805   -30.74   -35.23   36.71   $121,550   28.90   38.13   19.62
Georgia   3,773   -41.77   -62.21   24.44   $116,853   37.35   42.27   28.86
Hawaii   289   -30.02   -32.79   9.80   $872,000   N/A   N/A   N/A
Idaho   1,471   1.73   -6.07   28.58   $150,435   16.95   21.07   13.34
Illinois   4,670   -32.13   -51.15   25.28   $136,999   38.69   48.06   17.05
Indiana   1,560   -39.79   -66.54   15.82   $111,426   24.28   28.49   10.70
Iowa   277   -37.33   -40.56   4.63   $108,445   27.02   31.25   5.50
Kentucky   523   -45.63   -49.12   11.22   $94,992   42.68   46.95   28.82
Louisiana   385   -33.04   -49.54   10.17   $122,678   32.89   36.49   25.05
Maryland   2,040   -15.21   -45.77   20.48   $198,474   37.57   44.52   33.26
Michigan   6,665   -31.54   -47.32   33.49   $72,733   39.16   41.80   21.63
Minnesota   802   -55.17   -70.86   9.72   $150,783   25.47   28.53   15.57
Missouri   2,072   -23.03   -44.08   17.49   $130,104   17.96   17.02   24.81
Montana   164   13.89   7.89   8.92   $210,079   N/A   N/A   N/A
Nevada   7,707   -13.68   -44.88   58.90   $132,585   20.48   25.33   9.96
New Hampshire   89   -30.47   -81.57   7.67   $198,519   16.70   32.55   7.85
New Jersey   1,623   -39.89   -58.08   13.06   $227,361   37.00   49.78   25.05
New Mexico   175   -59.68   -59.86   6.05   $182,728   11.32   3.10   20.48
New York   1,423   -37.29   -60.67   7.12   $306,229   19.26   46.32   5.65
North Carolina   1,693   -28.41   -46.42   10.83   $143,636   29.15   31.93   17.76
Ohio   4,401   -29.22   -44.42   20.71   $79,611   42.61   48.61   22.22
Oklahoma   529   -17.60   -48.29   10.73   $91,641   36.54   41.28   29.81
Oregon   2,041   -15.06   -37.03   30.03   $181,947   27.48   31.09   17.68
Pennsylvania   1,806   -39.82   -47.13   10.59   $121,438   36.96   44.56   15.65
South Carolina   1,541   -25.09   -36.92   18.40   $154,590   20.34   27.77   -5.55
Tennessee   2,201   -32.71   -57.96   17.84   $100,021   41.30   42.07   30.86
Texas   6,404   -22.17   -45.29   11.50   $146,554   26.93   30.08   15.24
Utah   874   -54.88   -67.17   15.06   $212,887   3.69   5.96   -2.11
Virginia   3,133   -26.20   -45.36   25.74   $217,144   34.86   39.40   24.50
Washington   1,806   -28.56   -55.77   12.87   $220,636   25.18   30.18   12.40
Wisconsin   911   -40.07   -56.14   12.45   $97,650   39.48   44.81   26.33

Report License
The RealtyTrac U.S. Foreclosure Sales Report is the result of a proprietary evaluation of information compiled by RealtyTrac; the report and any of the information in whole or in part can only be quoted, copied, published, re-published, distributed and/or re-distributed or used in any manner if the user specifically references RealtyTrac as the source for said report and/or any of the information set forth within the report.

About RealtyTrac Inc.
RealtyTrac (www.realtytrac.com) is the leading online marketplace of foreclosure properties, with more than 1.5 million default, auction and bank-owned listings from over 2,200 U.S. counties, along with detailed property, loan and home sales data. Hosting more than 3 million unique monthly visitors, RealtyTrac provides innovative technology solutions and practical education resources to facilitate buying, selling and investing in real estate. RealtyTrac's foreclosure data has also been used by the Federal Reserve, FBI, U.S. Senate Joint Economic Committee and Banking Committee, U.S. Treasury Department, and numerous state housing and banking departments to help evaluate foreclosure trends and address policy issues related to foreclosures.

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