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Foreclosures accounted for 26 percent of home sales in 2010

February 25, 2011 - A new industry report showed more than a quarter of home sales last year came on foreclosure properties, showing families were keen on moving to properties they could buy at a dramatic discount.

According to the latest foreclosure sale report from RealtyTrac, a total of 831,574 distressed homes were sold to third parties last year, representing 26 percent of all home sales in 2010. That was down from 29 percent in 2009 but up from 23 percent in 2008. Additionally, the report showed relocating families often found significant bargains on distressed properties, with these homes selling for an average price 28 percent less than the average price for non-foreclosure homes. That average discount was up from 27 percent a year earlier.

James Saccacio, the company's CEO, said foreclosure sales hit their lowest volume level since 2008, primarily because documentation controversies derailed many transactions.

"The catch-22 for 2011 is that while accelerating foreclosure sales will help clear the oversupply of distressed properties and return balance to the market in the long run, in the short term a high percentage of foreclosure sales will continue to weigh down home prices," said Saccacio.

Homeowners trying to sell their home and pack their moving boxes have long felt the effect of nearby foreclosures. According to a report from the Massachusetts Institute of Technology and Harvard University, distressed properties can drop the value of homes within 250 feet by at least 1 percent.
 

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