Foreclosures still plague housing market

Dec. 2, 2010 at 5:34 PM   |   Comments

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IRVINE, Calif., Dec. 2 (UPI) -- U.S. home buyers are finding steep discounts in the marketplace with 25 percent of home sales involving foreclosed property, an online seller said Thursday.

In the third quarter, homes in some stage of foreclosure sold for 32 percent less than homes not involved in foreclosure, Realtytrac.com reported.

Homes involved in foreclosure were priced 26 percent lower than the rest of the homes on the market in the second quarter, the company said.

Comparing prices, the average price of homes involved in foreclosure in the third quarter was $169,523, down 2.46 percent from the second quarter.

Homes not involved in foreclosure sold for an average of $249,721, 6.42 percent higher than the second quarter, the firm said.

RealtyTrac Chief Executive Officer James Saccacio said demand for homes dropped sharply with the end of the first-time buyer tax credit that ended in June.

Demand was also disrupted by the "foreclosure-processing controversy," he said.

"A quick but responsible resolution to that issue would be ideal to help the market to continue to properly clear out foreclosure inventory," he said, referring to court challenges to shortcuts lenders took when processing foreclosures.

The issue caused several large lenders to suspend pursuit of foreclosures while they reviewed their procedures.

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