NEW YORK (MainStreet) — Foreclosures accounted for 20% of all homes on the market in the third quarter of 2011, according to RealtyTrac. The percentage of foreclosures, also known as distressed properties, on the market dropped from 22% the second quarter of 2011 and 30% in the third quarter of 2010.
Daren Blomquist, RealtyTrac's director of marketing communications, says that the percentage decrease can partly be attributed to processing and title issues that are limiting the supply of foreclosures on the market.
However, “we are starting to see demand for homes pick back up, which is helping to dilute the percentage of foreclosure sales,” he says.
RealtyTrac expects the percentage of distressed properties for sale to remain steady in the coming months as the increasing demand for homes is balanced out by a growing number of filings making it through the system.
Currently, distressed properties are still being sold well below market price.
According to the firm’s estimates, the average sales price of foreclosed or bank-owned homes in the third quarter of 2011 was $165,322. The price tag is 34% below the average sales price of homes not in foreclosure. It matches the foreclosure discount posted in the second quarter, but is below the 37% discount exhibited in the third quarter of 2010.
State by state, Nevada continues to have the highest percentage of foreclosure-related sales, with distressed properties accounting for nearly 57% of all residential transactions during the third quarter.
California and Arizona followed with 44% and 43% of total residential property sales in the third quarter coming from foreclosures, respectively. Other states with a high percentage of foreclosure-related sales include Georgia, Colorado and Michigan.