Foreclosed Homes Sell at 27% Discount as Supply Grows

[marmar]

Foreclosed Homes Sell at 27% Discount as Supply Grows (Update2)
By Dan Levy


June 30 (Bloomberg) -- Homes in the foreclosure process sold at an average 27 percent discount in the first quarter as almost a third of all U.S. transactions involved properties in some stage of mortgage distress, according to RealtyTrac Inc.

A total of 232,959 homes sold in the period had received a default or auction notice or were seized by banks, RealtyTrac said in a report today. That’s down 14 percent from the fourth quarter and 33 percent from the peak a year earlier, the company said. The average price of a distressed property was $171,971, according to the Irvine, California-based data seller.

“The discount will probably stay between 25 percent and 30 percent as lenders carefully manage the number of new foreclosure actions in order to avoid flooding the market,” Rick Sharga, RealtyTrac’s senior vice president for marketing, said in an interview.

“We’re clearly creating more properties that will be sold at distressed prices than the market is absorbing,” Sharga said. There were more than 250,000 new bank seizures in the first quarter.

The discount reflects the average sales price of homes in the foreclosure process compared with the average sales price of properties not in distress. About 31 percent of all U.S. sales in the quarter were of homes in some stage of foreclosure, RealtyTrac said. ........(more)

The complete piece is at: http://noir.bloomberg.com/apps/news?pid=20601010&sid=aA...

[DJ13]

1. as lenders carefully manage the number of new foreclosures to avoid flooding the market

Good luck with that.

Last I read a few months back the shadow inventory (foreclosed and pending foreclosure but not listed yet for sale) already stood near 7 million homes, and expected to rise by several hundred thousand per month through the rest of this year.

Theres no way short of demolition to try and keep enough off the market so the prices dont collapse further.

[PassingFair]

7. They're starting to disgorge them here a quite a clip....

Asking about ONE HALF of what is owed.

My next door neighbor's house had been refinanced to $134,000.00

It came up for sale (a year after he walked away) for $68,000.00

When I look at the selling histories of homes around me, it seems
that the banks are letting them go for half of what's owed.....

[Robb]

2. Anecdotally, that sounds about right.

Former neighbor's house in my old neighborhood still hasn't sold. Early last year he was asking $380K, before it got foreclosed on the price was $310K, so I'm guessing that's about where the note sat.

Back on the market as an REO, first offered at $290K, then $270-something, right now (this is only like six months, tops, since the bank took it back) $255K.

Still for sale. I wonder at what price the bottom-feeders will appear, I would've thought a few prices ago.

[Bigmack]

3. I think it's gonna go a LOT lower... nt

[alcibiades_mystery]

4. I'd put in a bid at $190, tops

And I wouldn't go above $192.

[LiberalFighter]

5. It may be a good deal but then there will be the property taxes.

They don't look at what you paid.

[Wilms]

6. Discount? That's what it's called when the price drops halfway to where it really should be?

[SunnySong]

8. But Palm Springs numbers are up Green shoots Green Shoots...

you know I'm being snarky right?