Foreclosures made up 31 pct. of home sales in 2Q

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Foreclosures made up 31 pct. of home sales in 2Q


Foreclosures made up roughly one-third of all home sales this spring. While  that’s a smaller share of sales from the previous quarter, it’s six times the  percentage of foreclosures in a healthy housing market.

Foreclosure sales, which include homes purchased after they received a notice  of default or that were repossessed by lenders, accounted for 31 percent of the  market in the April-June quarter, foreclosure listing firm RealtyTrac Inc. said  Thursday.

The share of the market would likely have been larger this spring if not for  a state and federal investigation into faulty paperwork by banks and servicers.  The probe has led many banks to delay foreclosure sales. Once that is complete,  foreclosures will likely surge later this year.

As a slice of all home purchases, foreclosure sales peak two years ago at  37.4 percent. In the second quarter, they declined from 36 percent in the  January-March period.

In all, 265,087 homes in some stage of foreclosure or owned by banks were  sold in the second quarter, down 11 percent from the same period a year ago.  Sales of all other types of homes also declined, according to RealtyTrac’s  figures, which differ from other home-sales estimates.

Bank-owned homes, which are sold after being repossessed, accounted for  nearly 19 percent of all sales. That’s unchanged from the previous quarter.

Distressed properties, often in need of repair, typically sell at big  discounts and weaken prices for neighboring homes.

A bank-owned home this spring sold for 40 less than the average price of  other homes, according to RealtyTrac. That’s up from 36 percent in the previous  quarter and 34 percent from the same quarter one year ago.

Sales of homes in the foreclosure process or short sales went for 21 percent  less than the average home sold, the firm said. That’s up from an average of 17  percent in the first quarter and 14 percent in the second quarter of 2010. A  short sale is when the lender agrees to accept less than what is owed on the  mortgage.

The average sales price of a foreclosure property was $164,217, down less  than 1 percent from the January-March quarter and nearly 5 percent from the  April-June quarter in 2010, the firm said.

Nevada led all states with foreclosure sales, accounting for 65 percent of  all home sales, RealtyTrac said.

In Arizona, foreclosure sales represented 57 percent of all home sales for  the quarter, up 16 percent from a year ago. In California, foreclosure sales  accounted for 51 percent of all home sales in the second quarter, virtually  unchanged from last year.

Several other states had foreclosure sales that accounted for at least one  third of all home sales in the first quarter: Michigan, Colorado, Florida,  Illinois and Oregon.

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