27 Percent Discount for Distressed and Foreclosed Homes

Published by nora | Filed under Buyer / Seller Tips, Communities, Market Trends, Miscellaneous, Mortgage / Finance, Real Estate, Shout Outs

The nearly 233,000 distressed and foreclosed homes sold throughout the country in the first three months this year were sold at an average discount of 26.7 percent, based on a report from RealtyTrac.

This means that hundreds of thousands of Americans were able to buy their homes at almost 27 percent below the average price of non-foreclosed homes. Although the housing crisis hurt countless homeowners who lost their properties, it made possible for a huge number of families who otherwise could not afford to buy a home to fulfill their dreams of home ownership.

The data on total claims for the $8,000 federal tax credit program also proves that the plunge in home prices due to bargain-priced foreclosures was one major factor that enticed record numbers of Americans to buy their first homes.

An estimated 1.8 million American taxpayers took advantage of the $8,000 federal tax credit program since its launching in April 2008. The total of tax credits claimed from April 2008 to February this year has reached $12.6 billion, based on data from the Treasury Department and the Internal Revenue Service.

Additionally, the first time home buyer tax credits also helped push up home sales from a low of 4.53 million in annual pace in January 2009 to a record high 6.49 million in annual pace in November last year.

The state with the highest sales price discount for distressed and foreclosed homes in the first quarter was Ohio, where the average discount was 39.5 percent. Kentucky was next with 39.2 percent and Illinois was third with 39.1 percent. Fourth and fifth on the chart were California, which posted a 37.8-percent discount, and Tennessee, which posted a 37.4-percent discount.

These price discounts were compiled from sales data involving all sales of homes in various phases of foreclosure: default, lis pendens, trustee sale, foreclosure sale and real-estate owned. They didn’t include transfers of homes to banks which repossessed the properties.

The average price discount for the 144,503 bank-owned homes sold in the first three months was 34 percent and the average price discount for all short sales was 14.8 percent. REO sales accounted for 19 percent of all house sales while pre foreclosure sales made up almost 12 percent of total sales.

On the whole, the more than 31-percent share of foreclosures in the total of home sales nationwide and the nearly 26.7-percent average price discount in the first quarter are proofs that record numbers are taking advantage of home ownership opportunities.

Indeed, people dreaming of home ownership are encouraged to look at homes and buy now while mortgage rates and house prices are still at relatively low levels.

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