Foreclosures Make Up 24% of Home Sales

Foreclosed homes accounted for 24% of all residential sales in the second quarter of 2010, according to the latest data from RealtyTrac, a firm that monitors the foreclosure market.

A total of 248,534 U.S. properties in some stage of foreclosure  - default, scheduled for auction or bank repossession — sold to third parties in the second quarter. While this represents an increase of nearly 5% from the previous quarter, the figures are down 20% from the same time last year.

It wasn’t all bad news, though.

“While foreclosure sales increased in the second quarter, non-foreclosure sales increased even more, spurred on by the homebuyer tax credit that expired during the quarter,” James J. Saccacio, CEO of RealtyTrac, said.

Saccacio did warn, however, that this may be only a temporary rise as the expiration of the homebuyer tax credit could drive more buyers back to discounted short sales and bank repossessions.

According to the latest data, the average sales price of properties that sold while in some stage of the foreclosure process was over 26% below the average sales price of properties not in foreclosure. This represents a 27% decrease from the average discount in the first quarter.

A separate study conducted by industry group S&P/Case-Shiller indicated that home prices have been on the rise for the last five consecutive months for which data is available. Prices rose only slightly in July, up 0.6% compared to June, according to the group’s 20-city home price index. Housing prices rose 3.2% from the previous year.

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