Short sales hit new high as banks set lower prices

May 31, 2012 02:30PM

Sales of homes in some stage of foreclosure accounted for 26 percent of all nationwide residential sales during the first quarter — a three-year high, according to a new RealtyTrac report. This marks an increase from 22 percent of all sales in the fourth quarter of last year and another from 25 percent in the prior-year quarter. But with this increase comes a record price decrease.

“Those pre-foreclosure sales hit a three-year high in the first quarter even as the average pre-foreclosure sales price dropped to a record low for our report,” said RealtyTrac CEO Brandon Moore in the report. “Lenders are approving more aggressively priced short sales, which in turn is resulting in more successful short sale transactions.”

Pre-foreclosure homes, which typically trade via short sale, sold for an average price of $175,461 in the first quarter, down 4 percent quarter-over-quarter and 10 percent year-over-year. The average sales price of homes in foreclosure was $161,214. This amount is down 1 percent quarter-over-quarter and down 2 percent year-over-year, and marks a 27 percent discount from the average sales price of homes that are not in foreclosure.

As previously reported, New York-area foreclosures have spiked in recent months, with one foreclosure present in every 981 homes. New York was not mentioned in today’s RealtyTrac report, but cities with the biggest annual increases in pre-foreclosure sales included Atlanta at the top with 78 percent, Detroit in second with 75 percent and San Antonio with 74 percent. — Zachary Kussin