24 Percent of All U.S. Residential Sales in Q4 2011 Under Foreclosure

RealtyTrac(R), the leading online marketplace for foreclosure properties, today released its Q4 and Year-End 2011 U.S. Foreclosure Sales Report(TM), which shows that sales of homes that were in some stage of foreclosure or bank owned accounted for 24 percent of all U.S. residential sales during the fourth quarter – up from 20 percent of all sales in the previous quarter, but down from 26 percent of all sales in the fourth quarter of 2010.

Third parties purchased a total of 204,080 residential properties in some stage of pre-foreclosure (NOD, LIS, NTS, NFS) or bank-owned (REO) during the fourth quarter, down 8 percent from a revised third quarter total and down 2 percent from the fourth quarter of 2010. That brought total foreclosure-related sales in 2011 to 907,138, down 2 percent from 2010 and accounting for 23 percent of all sales during the year.

The average sales price of homes in foreclosure or bank owned was $164,944 in the fourth quarter, nearly identical to the average foreclosure-related sales price in the previous quarter and down 5 percent from the fourth quarter of 2010. The average price of a foreclosure-related sale was 29 percent below the average price of a non-foreclosure sale during the quarter, down from a 34 percent foreclosure discount in the third quarter and down from a 35 percent foreclosure discount in the fourth quarter of 2010.

“Sales of foreclosures in the fourth quarter continued to be slowed by questions surrounding proper foreclosure paperwork and procedures,” said Brandon Moore, chief executive officer of RealtyTrac. “Even so, foreclosures accounted for nearly one in every four sales during the quarter and for the entire year. We expect to see foreclosure-related sales increase in 2012, particularly pre-foreclosure sales, as lenders start to more aggressively dispose of distressedassets held up by the mortgage servicing gridlock over the past 18 months.

“We continued to see a shift toward pre-foreclosure sales, or short sales, and away from REO sales in the fourth quarter,” Moore continued. “Nationally, pre-foreclosure sales increased 15 percent from a year ago while REO sales decreased 12 percent. Pre-foreclosure sales outnumbered REO sales in several bellwether markets, including Los Angeles, Miami and Phoenix, where REO sales had outnumbered pre-foreclosure sales a year ago. That trend willlikely show up in more local markets in 2012 as lenders recognize short sales as a better option for many of their non-performing loans.”

Pre-foreclosure sales increase 15 percent from year ago

Third parties purchased a total of 88,303 pre-foreclosure homes – in default or scheduled forauction – during the fourth quarter, a decrease of 5 percent from the previous quarter but up 15 percent from the fourth quarter of 2010. Pre-foreclosure sales accounted for 10 percent of all sales during the fourth quarter and 9 percent of all sales for all of 2011.

Pre-foreclosure sales increased more than 20 percent on a year-over-year basis in several states, including Michigan (103 percent), Georgia (59 percent), Arizona (48 percent), Washington (36 percent), Nevada (29 percent), Oregon (27 percent), Illinois (26 percent), Ohio (25 percent), California (23 percent) and Texas (22 percent).

Pre-foreclosures, which are often sold via short sale, sold for an average of $184,221 in the fourth quarter, down 3 percent from the previous quarter and down 11 percent from the fourth quarter of 2010. The average sales price of a pre-foreclosure home in the fourth quarter was 21 percent below the average sales price of a non-foreclosure home, similar to the discount of 22 percent on pre-foreclosure purchases for the entire year.

Pre-foreclosure homes that sold in the fourth quarter took an average of 308 days to sell after starting the foreclosure process, down from an average of 318 days in the third quarter but still up from an average of 237 days in the fourth quarter of 2010.

REO sales decrease 12 percent from year ago Third parties purchased a total of 115,777 bank-owned (REO) homes in the fourth quarter, down 10 percent from the previous quarter and down 12 percent from the fourth quarter of 2010. REO sales accounted for 13 percent of all sales during the fourth quarter and 14 percent of all sales for all of 2011.

Despite the nationwide decrease, REO sales increased 20 percent or more on a year-over-year basis in several states, including Minnesota (65 percent), Wisconsin (23 percent), Washington (21 percent) and Illinois (20 percent).

REOs sold for an average of $149,686 in the fourth quarter, up 2 percent from the previous quarter but down 2 percent from the fourth quarter of 2010. The average sales price of a bank-owned home in the fourth quarter was 36 percent below the average sales price of a non-foreclosure home, while the discount on bank-owned homes for the entire year was 40 percent.

REOs that sold in the fourth quarter took an average of 175 days to sell after completing the foreclosure process, down from 193 days in the third quarter but still up from 171 days in the fourth quarter of 2010.

Nevada, California, Georgia post highest percentage of foreclosure sales Foreclosure sales accounted for 56 percent of all residential sales in Nevada in the fourthquarter, the highest percentage of any state. Third parties purchased a total of 52,086 homes in foreclosure or bank-owned in Nevada during all of 2011, representing 54 percent of all sales and up 17 percent from 2010.

California foreclosure-related sales accounted for 43 percent of the state’s total residential property sales in the fourth quarter, the second highest percentage among the states. Third parties purchased a total of 246,780 homes in foreclosure or bank-owned in California during all of 2011, the most of any state and up 2 percent from 2010.

Foreclosure sales accounted for 39 percent of all residential sales in Georgia in the fourth quarter, the third highest percentage of any state. Third parties purchased a total of 44,631 homes in foreclosure or bank-owned in Georgia during all of 2011, representing 36 percent of all sales and up 18 percent from 2010.

Other states where foreclosure-related sales accounted for 20 percent or more of all sales in the fourth quarter were Arizona (38 percent), Michigan (33 percent), Colorado (26 percent), Illinois (26 percent), Minnesota (23 percent), Washington (21 percent), and Florida (20 percent).

Click here to view the full report with a list of top metros to buy bank-owned and short-sale properties.

Report methodology

The RealtyTrac U.S. Foreclosure Sales Report is produced by matching national address-level arms-length sales deed data against RealtyTrac’s foreclosure database of pre-foreclosure (NOD, LIS), auction (NTS, NFS) and bank-owned (REO) properties. A property is considered a foreclosure sale if a sales deed is recorded for the property while it was actively in some stage of foreclosure or bank-owned. Previous quarterly numbers may be revised upon the issuance of a new quarterly foreclosure sales report because of new sales deed data received by RealtyTrac. The foreclosure discount is calculated by comparing the percentage difference between the average sales price of properties not in foreclosure to the average sales price of properties in some stage of foreclosure or bank-owned. States without sufficient foreclosure sales data to calculate average prices are not included in the report.

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.

Report License

The RealtyTrac U.S. Foreclosure Sales Report is the result of a proprietary evaluationof information compiled by RealtyTrac; the report and any of the information inwhole or in part can only be quoted, copied, published, re-published, distributedand/or re-distributed or used in any manner if the user specifically referencesRealtyTrac as the source for said report and/or any of the information set forthwithin 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 online marketplace of foreclosure properties, with more than 1.5 million default, auction and bank-owned listings from over 2,200 U.S. counties, along with detailed property, loan and home sales data. Hosting millions of unique monthly visitors, RealtyTrac provides innovative technology solutions and practical education resources to facilitate buying, selling and investing in real estate. RealtyTrac’s foreclosure data has also been used by the Federal Reserve, FBI, U.S. Senate Joint Economic Committee and Banking Committee, U.S. Treasury Department, and numerous state housing and bankingdepartments, private companies and academic institutions to help evaluate foreclosure trends and address policy issues related to foreclosures.

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