subject: Foreclosures make up 25 percent of new home purchases in third quarter [print this page] Foreclosures make up 25 percent of new home purchases in third quarter
Price reduced foreclosures comprised 25 percent of all the home sales in the United States during the third quarter of 2010, according to the U.S. Foreclosure Sales Report.
But with the homeowners' tax credit ending in June, there was still an overall drop also 25 percent in the number of foreclosures sold to third parties.
However, the number of homes sales is not the only metric for which to measure foreclosures' impact on the housing market. For instance, this quarter, distressed homes sold at an average of 32 percent lower from the sales price of homes not listed as foreclosure. In other words, non-foreclosures were being sold at a higher price (and not necessarily foreclosures at lower prices), thus possibly demonstrating that the non-foreclosure housing market is on the rise. While it would be wrong to assume such a thing, it is nevertheless a possibility.
"The expiration of the homebuyer tax credit in the second quarter created a substantial dip in overall buyer demand in the third quarter," said James J. Saccacio, chief executive officer of RealtyTrac."Demand for foreclosures also dipped in the third quarter, but those who did purchase a short sale or REO during the quarter were able to get an average discount of more than 32 percent the highest average foreclosure discount we've seen since the fourth quarter of 2005."
In Saccacio's opinion, that drop will continue through the fourth quarter.
But the bottom line is that there are indicators that the overall housing market is moving forward inch by inch and, at this point, those are victories within themselves.
