NEW YORK (Reuters) - Sales of homes in default jumped in the first quarter to the highest level in three years as steeper price discounts were offered, a report from RealtyTrac said on Thursday.
Known as pre-foreclosure or short sales, the first three months of the year saw such sales jump 16 percent to 109,521 homes compared to the fourth quarter of 2011.
That was an increase of 25 percent compared to the year before and the highest level since the first quarter of 2009.
Pre-foreclosure sales are typically done to allow the troubled homeowner to avoid going into foreclosure.
Sales of homes that were in foreclosure or bank owned also rose 8.3 percent to 233,299, though it was off 0.2 percent from a year ago.
Foreclosure sales accounted for 26.5 percent of all residential sales, up from 22 percent, while pre-foreclosure made up 12 percent of all sales during the quarter, up from 10 percent in the previous quarter.
“Lenders are approving more aggressively priced short sales, which in turn is resulting in more successful short sale transactions,” Brandon Moore, chief executive officer of RealtyTrac, said in a statement.
The average sales price of a pre-foreclosure home fell 4 percent to $175,461, the lowest level recorded since the report began tracking data in 2005.
Homes in foreclosure on average went for $161,214, down 1 percent from the fourth quarter and a discount of 27 percent compared to the average price of a non-distressed home.
Hard-hit Nevada took the top spot for foreclosure sales at 56 percent of all home sales, while California came in second at 47 percent.
Reporting by Leah Schnurr; Editing by James Dalgleish