A recent report from the foreclosure data firm RealtyTrac indicates that in 2011 nearly 20 percent of all residential sales during the third quarter were for foreclosed houses.
According to the report, a number of homebuyers capitalized on affordable interest rates and the low prices available through the purchase of distressed properties. Specifically, the firm showed that 221,536 homes that were in foreclosure or real estate-owned were sold during the four-month period.
However, despite accounting for a large share of home sale transactions, the number of foreclosure sales was notably less than prior quarters.
"While foreclosures continue to represent an excellent bargain-buying opportunity for many buyers and investors, foreclosure sales accounted for a smaller share of the total market in the third quarter," said RealtyTrac chief executive officer Brandon Moore. "That trend is not too surprising given the continued ambiguity surrounding proper foreclosure procedures - and the ripple effect that has on sales of foreclosed properties that might have been improperly foreclosed."
The report showed that foreclosure sales previous accounted for 22 percent of all home sales in the second quarter, and 33 percent during the third quarter.
Meanwhile, the report aldo indicated that the average sale price of a foreclosure edged 1 percent higher on a quarterly basis to $165,322. However, despite the increase, the price was 34 percent cheaper than the average sale price of non-distressed properties.
"Even with the hurdles to selling foreclosures, foreclosure sales continue to represent a historically high percentage of all sales," Moore added. "In 2005 and 2006, foreclosure sales consistently accounted for less than 5 percent of all sales nationwide."
State-by-state, Nevada, California and Arizona had the highest foreclosure sales of the quarter. In Nevada alone, the sale of distressed properties accounted for 57 percent of all transactions.
Meanwhile, 62,583 foreclosures and REO properties were purchased in California, making up a 44 percent share of sales, while foreclosure-related sales in Arizona accounted for 43 percent of all sales.
Additionally, property data in other states that had elevated rates of foreclosure sales were Georgia, Colorado and Michigan, where distressed sales made up 24, 26 and 23 percent of all home sales, respectively. *E-mailed press release