Foreclosures less of a market factor nationally, still high in Illinois

RealtyTrac today released its Q1 2013 U.S. Foreclosure & Short Sales Report, which shows that a total of 190,121 U.S. properties in some stage of foreclosure or bank-owned (REO) were sold during the quarter, a decrease of 18 percent from the previous quarter and down 22 percent from the first quarter of 2012.

From RealtyTrac’s news release:

These foreclosure-related sales accounted for 21 percent of all U.S. residential sales during the first quarter, down from 25 percent of all sales in the first quarter of 2012 and down from a peak of 45 percent of all sales in the first quarter of 2009.

Properties not in foreclosure that sold as short sales in the first quarter accounted for an estimated 15 percent of all residential sales — bringing the total share of distressed sales during the quarter to 36 percent. Non-foreclosure short sales also trended lower in the first quarter, down 10 percent from the previous quarter and down 35 percent from the first quarter of 2012.

“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, vice president at RealtyTrac. “Rising home prices in many markets are stunting the continued growth of short sales by reducing incentive for both underwater homeowners and lenders. 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.”

Other high-level findings from the report
States with the biggest percentage of foreclosure-related sales were Georgia (35 percent), Illinois (32 percent), California (30 percent), Arizona (28 percent), and Michigan (28 percent). States where foreclosure-related sales account for less than 10 percent of all sales include Massachusetts, New York, and New Jersey.

The average price of a foreclosure-related sale was $167,095 in the first quarter, down 1 percent from the previous quarter but up 3 percent from a year ago — the fourth straight quarter with an annual increase in the average price of foreclosure-related sales.

Markets with the biggest annual increases in the average price of foreclosure-related sales included San Jose, Calif., (up 30 percent), Dayton, Ohio, (up 27 percent), Phoenix (up 26 percent), Las Vegas (up 23 percent), and Sacramento, Calif., (up 21 percent)

The average price of a property in foreclosure was 30 percent below the average price of a non-foreclosure property in the first quarter, down from a 31 percent discount in the fourth quarter but up from a 28 percent discount in the first quarter of 2012.

Both pre-foreclosure sales and bank-owned sales decreased from the previous quarter and a year ago. Pre-foreclosure sales accounted for 10 percent of all residential sales in the first quarter, and bank-owned sales accounted for 11 percent of all residential sales.

States with the biggest percentages of non-foreclosure short sales were Rhode Island (44 percent), Connecticut (42 percent), Massachusetts (40 percent), Nevada (29 percent), Florida (26 percent), and Ohio 24 percent.

You can access the full report at RealtyTrac.

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