Foreclosed Homes Get Cheaper
According to a report from RealtyTrac, the difference in average selling price between foreclosed properties and other homes widened in 2010, and savvy housing investors can look forward to more of the same in 2011as more homes were seized that sold, the report said.
Foreclosed homes sold in 2010 were an average of 28 percent cheaper than traditional sales, up from a 27 percent average discount in 2009. While the increase is small, the trend, analysts say, suggests a widening gap between foreclosure sales and other residential deals. Foreclosed homes accounted for 26 percent of homes sold in 2010, down from 29 percent in 2009 and up from 23 percent in 2008.
In healthier economic times, foreclosures usually account for just about ten percent of sales. In total, 2010 saw 831,574 foreclosed properties sold, a figure that includes homes in some stage of foreclosure but not seized by lenders. The total is down 31 percent from 2009’s total and 14 percent lower than in 2008.
While the pace of foreclosure sales may be down, however, lenders increased their pace of repossessions in 2010, seizing more than a million homes. This has increased the so-called “shadow inventory”, which insiders say will have to be sold before a ful recovery in housing is realized.
