Buyers of Bank Owned Homes Got Substantial Price Discounts

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

Home buyers throughout the nation got significant price discounts when they bought bank owned homes in 2010, based on a report from RealtyTrac. Banks sold their real estate owned homes at an average discount of 36.3 percent in 2010, higher than the 33-percent average discount they gave in 2009. The discount rates were based on the average prices of non-foreclosure homes sold during the year.

Surprisingly, the states with the highest discounts were New Jersey and New York, places where foreclosure homes are expected to still command high prices despite the downward pressures of foreclosed properties. The average discount in New Jersey was 50.46 percent while the average in New York was 50.14 percent. They were the only states that surpassed the 50-percent level.

The states with the highest price discounts were the following:

1. New Jersey – 50.46 percent
2. New York – 50.14 percent
3. Ohio – 48.13 percent
4. Kentucky – 46.61 percent
5. Illinois – 46.29 percent
6. California – 46.11 percent
7. Pennsylvania – 46.08 percent
8. Wisconsin – 42.19 percent
9. Georgia – 41.62 percent
10. Michigan – 41.07 percent
11. Tennessee – 40.9 percent

Surprisingly also, most of the states which have been topping foreclosure charts since 2008 have lower price discounts than states not as hard hit by the housing crisis. Nevada, the state with the highest foreclosure rate in 2010, posted an average discount of only 21.71 percent. Arizona had an average discount of 31.32 percent and Florida posted an average discount of 38.13 percent. Utah, which posted the fifth highest foreclosure rate in 2010, was able to guard its home prices, as the average discount was a measly 2.73 percent.

The states with the highest share of foreclosure sales in 2010 were the following:

1. Nevada – 57.43 percent
2. Arizona – 49.17 percent
3. California – 44.47 percent
4. Florida – 36.2 percent
5. Michigan – 32.99 percent

A total of 831,574 foreclosure homes were sold in 2010, including units sold through the short sale scheme, accounting for 25.96 percent, or more than one-fourth, of all home sales during the year. The total dropped by more than 31 percent from the 2009 total and by nearly 14 percent from the 2008 total.

The figures above show that bank owned homes and short sale homes are still influencing home prices significantly as the price discounts are still substantial. The drop in the foreclosure share from 29 percent in 2009 to 25.96 percent this year, however, is a positive sign. It shows that home buyers are shifting their attention from low-priced foreclosures to affordably-priced new homes or existing homes.

Buyers interested in bank owned homes in Tampa, Florida can contact Tampa4U.com, a team of Tampa resident realtors who have been helping homebuyers for years.