Foreclosure sales made up 26% of 2010 home sales

by KERRI PANCHUK

Foreclosure sales continued to account for more than 20% of all U.S. home sales in the fourth quarter and fiscal year 2010, foreclosure data firm RealtyTrac said Thursday.

The Irvine, Calif.-based data firm said foreclosure sales made up 26% of all home sales last year, down from 29% in 2009, but still higher than 2008 levels when foreclosures accounted for roughly 23% of all home sales.

Buyers who acquired foreclosures in 2010 also benefited from a steep discount, with foreclosed homes selling 28% below the average price of non-distressed properties. Foreclosure sales a year earlier were selling 27% below the average sales price.

At the same time, the actual sales volume of properties not in distress declined 19% between 2009 and 2010 and 27% from 2008.

When looking at just the fourth quarter, the nation had 149,303 foreclosure sales during the period, a 22% decline from the third quarter and a 45% drop on a year-over-year basis. This decline occurred despite RealtyTrac recording a 21% monthly uptick in foreclosure sales during the single month of December. Foreclosure sales for the entire fourth quarter, accounted for 26% of total home sales in the period, with properties selling 28% below the price of non-foreclosures.

“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 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."

Saccacio noted that foreclosure sales are expected to pick up in 2011 — a blessing and a curse for the housing market.

“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.”

URL to original article: http://www.housingwire.com/2011/02/23/foreclosure-sales-made-up-26-of-2010-home-sales

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