Foreclosure Sales Increase 21 Percent in Third Quarter According to RealtyTrac Foreclosure & Short Sales Report

Thu Dec 6, 2012 12:01am EST

* Reuters is not responsible for the content in this press release.

  IRVINE, CA, Dec 06 (Marketwire) -- 
RealtyTrac(R) (www.realtytrac.com), the leading online marketplace for
foreclosure properties, today released its Q3 2012 U.S. Foreclosure &
Short Sales Report(TM), which shows a total of 193,059 U.S. properties in
some stage of foreclosure or bank-owned (REO) were sold during the third
quarter, an increase of 21 percent from the previous quarter, but still
down 3 percent from the third quarter of 2011. 

    The report also shows that foreclosure-related sales accounted for 19
percent of all U.S. residential sales during the third quarter -- down
from 20 percent in the previous quarter but the same level as in the
third quarter of 2011.

    Counter to the trend in recent years, sales of properties in some stage
of foreclosure (pre-foreclosure sales) outnumbered sales of foreclosed,
bank-owned properties in the third quarter. A total of 98,125
pre-foreclosure sales occurred during the quarter compared to a total of
94,934 REO sales.

    Other high-level findings from the report:


--  Pre-foreclosure sales increased 22 percent from the previous quarter
    and were also up 22 percent from the third quarter of 2011, while the
    average sales price decreased 3 percent from the previous quarter and
    was down 5 percent from a year ago.
    
    
--  REO sales increased 19 percent from the previous quarter but were
    still down 20 percent from the third quarter of 2011. The average REO
    sales price decreased 7 percent from the previous quarter but was
    still up 7 percent from the third quarter of 2011.
    
    
--  Homes in foreclosure or bank-owned sold at an average price that was
    32 percent below the average price of a home not in foreclosure, up
    from a 29 percent discount in the second quarter and a 31 percent
    discount in the third quarter of 2011.
    
    
--  Short sales of properties not in the foreclosure process increased 15
    percent from the previous quarter and were up 17 percent from the
    third quarter of 2011. These non-foreclosure short sales accounted for
    an estimated 22 percent of all residential sales, bringing the total
    distressed sale share to an estimated 41 percent for the quarter.
    
    
--  Non-foreclosure short sale prices in the third quarter fell short of
    the total amount of loans outstanding by an average of $82,312 per
    short sale. For all short sales, including non-foreclosure and
    in-foreclosure properties, the sales price was short of combined loan
    amounts by average of $94,896 per short sale.


    

"The shift toward earlier disposition of distressed properties
continued in the third quarter as both lenders and at-risk homeowners are
realizing that short sales are often a better alternative than
foreclosure," said Daren Blomquist, vice president of RealtyTrac.
"However, the scheduled expiration of the Mortgage Forgiveness Debt
Relief Act at the end of this year could stifle this trend toward short
sales. If that law expires as scheduled, homeowners who agree to a short
sale could see their income tax jump significantly because the portion of
the unpaid loan balance not covered by the short sale proceeds will be
considered taxable income in many cases.

    "The prospect of being taxed on potentially tens or hundreds of thousands
of dollars in additional income may motivate more distressed homeowners
to forgo a short sale and allow the home to be foreclosed," continued
Blomquist. "Additionally, if the mortgage interest deduction is
eliminated due to the fiscal cliff quagmire, it would give many
underwater and otherwise distressed homeowners one less reason to hang on
to their homes." 

    Pre-foreclosure sales increase from previous quarter and a year ago

Third parties purchased a total of 98,125 pre-foreclosure residential
properties -- in default or scheduled for auction -- during the third
quarter, an increase of 22 percent from the previous quarter and also an
increase of 22 percent from the third quarter of 2011. Pre-foreclosure
sales accounted for 10 percent of all sales during the quarter, the same
as the previous quarter but up from 8 percent of all sales in the third
quarter of 2011.

    Pre-foreclosure properties sold for an average price of $191,025 in the
third quarter, down 3 percent from the second quarter and down 5 percent
from the third quarter of 2011. The average sales price of a
pre-foreclosure residential property in the third quarter was 27 percent
below the average sales price of a non-foreclosure residential property,
up from a 25 percent discount in the previous quarter and a 19 percent
discount in the third quarter of 2011.

    Pre-foreclosure homes that sold in the third quarter took an average of
359 days to sell after starting the foreclosure process, up from an
average of 319 days in the previous quarter and up from an average of 318
days in the third quarter of 2011.

    REO sales spike from previous quarter, still down from a year ago
 Third
parties purchased a total of 94,934 bank-owned (REO) residential
properties in the third quarter, an increase of 19 percent from the
previous quarter but down 20 percent from the third quarter of 2011. REO
sales accounted for 10 percent of all residential sales during the
quarter, the same as in the second quarter but down from 11 percent of
sales in the third quarter of 2011.

    REOs sold for an average price of $161,954 in the third quarter, down 7
percent from the second quarter but up 7 percent from the third quarter
of 2011. The average sales price of a bank-owned home in the third
quarter was 38 percent below the average price of a non-foreclosure home,
up from a 33 percent discount in the second quarter but down from a 39
percent discount in the third quarter of 2011.

    REOs that sold in the third quarter took an average of 186 days to sell
after being foreclosed, down from 195 days in the second quarter and 193
days in the third quarter of 2011. 

    Non-foreclosure short sales increase from previous quarter and a year ago

Short sales (where the sales price was below the estimated total of all
outstanding loans on a given property) of properties not in foreclosure
increased 15 percent from the previous quarter and were up 17 percent
from the third quarter of 2011.

    These non-foreclosure short sales accounted for an estimated 22 percent
of all residential sales during the third quarter. When combined with the
foreclosure sales share of 19 percent, that brought the total distressed
sales share for the quarter to an estimated 41 percent of all residential
sales. 

    On average, these non-foreclosure short sales had a final sales price
that was $82,312 below the combined amount of outstanding loans for the
property being sold. For all short sales, including both non-foreclosure
and in-foreclosure, the final sales price was on average $94,896 short of
the loan amount.

    Georgia, California, Arizona post highest percentage of foreclosure sales

Foreclosure sales accounted for 38 percent of all residential sales in
Georgia, the highest percentage of any state during the third quarter but
down from 41 percent of all sales in the second quarter. Pre-foreclosure
sales in Georgia increased 40 percent on a year-over-year basis and REO
sales increased 4 percent. Non-foreclosure short sales in Georgia
increased 32 percent on a year-over-year basis and accounted for an
estimated 18 percent of all residential sales in the third quarter.

    California foreclosure-related sales decreased 12 percent on a
year-over-year basis, but those sales still accounted for 36 percent of
all residential sales, the second highest percentage of any state.
California pre-foreclosure sales increased 17 percent on a year-over-year
basis while REO sales were down 37 percent. Non-foreclosure short sales
in California increased 20 percent on a year-over-year basis and
accounted for an estimated 14 percent of all residential sales in the
third quarter.

    Foreclosure-related sales accounted for 34 percent of all residential
sales in Arizona, the third highest percentage of any state despite a 28
percent year-over-year decrease. Pre-foreclosure sales were still up 6
percent on a year-over-year basis in Arizona, but REO sales decreased 49
percent from a year ago. Non-foreclosure short sales in Arizona increased
12 percent on a year-over-year basis and accounted for an estimated 16
percent of all residential sales during the third quarter.

    Other states where foreclosure-related sales accounted for at least 20
percent of all sales were Nevada (31 percent), Florida (26 percent),
Illinois (24 percent), Michigan (24 percent), and Colorado (20 percent).

    Metro Trends
 Foreclosure-related sales accounted for 54 percent of all
residential sales in Modesto, Calif., the highest percentage of any of
the nation's 100 largest metropolitan statistical areas in terms of
population.

    Six other California metro areas were in the top 10 in terms of
percentage of foreclosure-related sales: Stockton (53 percent);
Riverside-San Bernardino-Ontario (47 percent), Sacramento (40 percent),
Bakersfield (39 percent), Oxnard-Thousand Oaks-Ventura (36 percent), and
Los Angeles-Long Beach-Santa Ana (34 percent).

    Metro areas outside of California with percentage of foreclosure-related
sales ranking among the top 10 were Atlanta (41 percent), Tucson, Ariz.,
(40 percent), and Phoenix (34 percent).

    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. 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
(including both Pre-Foreclosure Sales and 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.

    Non-foreclosure short sale: the property was sold for less than what was
owed on the mortgage but was not in foreclosure at the time of the sale.

    Click here to learn about RealtyTrac's methodology and view graphics
depicting the latest foreclosure sales trends.

    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.

    Order Customized Reports
 Detailed and historical foreclosure data used
to create the above report may be purchased through the RealtyTrac Data
Licensing Department at 949.502.8300 Ext. 158. Aggregate data is
available at the state, metro, county and zip code levels dating back to
2005, and address-level foreclosure records are also available
historically.

    About RealtyTrac Inc.
 RealtyTrac (www.realtytrac.com) is the leading
supplier of U.S. real estate data, with more than 1.5 million active
default, foreclosure auction and bank-owned properties, and more than 1
million active for-sale listings on its website, which also provides
essential housing information for more than 100 million homes nationwide.
This information includes property characteristics, tax assessor records,
bankruptcy status and sales history, along with 20 categories of key
housing-related facts provided by RealtyTrac's wholly-owned subsidiary,
Homefacts(R). RealtyTrac's foreclosure reports and other housing data are
relied on by the Federal Reserve, U.S. Treasury Department, HUD, numerous
state housing and banking departments, investment funds as well as
millions of real estate professionals and consumers, to help evaluate
housing trends and make informed decisions about real estate. 

    

Media Contacts:
Jennifer von Pohlmann
949.502.8300, ext. 139
jennifer.vonpohlmann@realtytrac.com

Ginny Walker
949.502.8300, ext. 268
ginny.walker@realtytrac.com 

Order Custom Data:
Data Sales Department
800.913.0439
datasales@realtytrac.com 

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