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Foreclosure taints one in four home sales

Aug. 30, 2012 at 12:01 AM   |   Comments

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IRVINE, Calif., Aug. 30 (UPI) -- Nearly a quarter of all U.S. home sales involved a property in some stage of foreclosure in the second quarter, real estate firm RealtyTrac said Thursday.

RealtyTrac, which monitors properties in foreclosure, said 23 percent of homes sold in the second quarter were either bank-owned or involved in the foreclosure process.

While the housing market shows some signs of strength with prices rising, the percentage of home sales that include properties involved in foreclosure has risen from 22 percent in the first quarter and from 19 percent in the second quarter of 2011.

However, the number of sales involving foreclosures dropped to 224,429 April through June, down 12 percent from the January through May period and down 22 percent from the second quarter of 2011.

With the tighter supply, prices are rising. The average sales price in the second quarter for a foreclosure-related property was $170,040, a 6 percent increase from the first quarter and a 7 percent climb from the same period a year earlier.

The decline in the total number of foreclosure-related sales paved the way for the first annual decrease after five consecutive quarters with year-to-year increases. The average price increase, meanwhile, was the first such gain since the second quarter of 2010 and the largest average price gain since October through December of 2006, RealtyTrac said.

"The second quarter sales numbers provide solid statistical evidence of what we've been hearing ... from real estate agents, buyers and investors over the past few months: There is a limited supply of available foreclosure inventory to choose from in many markets," said Daren Blomquist, RealtyTrac vice president.

Teasing out the data state by state showed 43 percent of all residential property sales in Georgia and Nevada in the second quarter involved property in some stage of foreclosure.

California had the third largest percentage at 40 percent of all residential sales.

Nine other states saw foreclosure-related sales that were at least a 20 percent of all residential sales.

Data showed at least one in five sales in Florida and Oregon (21 percent of all sales), Minnesota, Wisconsin and Colorado (22 percent), New Hampshire (24 percent), Illinois (27 percent), Arizona (33 percent) and Michigan (35 percent) included properties in some stage of foreclosure, RealtyTrac said.

© 2012 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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