Real estate data indicates that foreclosed houses will continue to add downward pressure of home prices for years to come.
According to the most recent FNC Residential Price Index, the presence of distressed properties, including foreclosures, short sales and REO properties, accounted for more than 27 percent of all home sale in February 2012.
However, despite the significant share, the report noted that it a notable decrease from a year earlier when distressed properties accounted for 32.2 percent of all home sale transactions.
Additionally, the median price discount a buyer received from on a foreclosure was an estimated 18.4 percent during the fourth quarter of last year. While this still saved prospective buyers a significant amount of money, the report noted that it was a decrease of 1.8 percent from the previous quarter and 1.2 percent below the savings received in the fourth quarter of 2010.
The presence of foreclosures could be negative for some, but it gives potential buyers an opportunity to make the transition to homeownership at a bargain price. As a result, mortgage application filings surged 4.8 percent during the week ending March 30, according to the Mortgage Bankers Association.