RealtyTrac reports that homes in some stage of foreclosure accounted for 26% of all residential home sales during the first quarter of 2012. The report -- issued Tuesday, June 5 -- included properties that were either in default, scheduled for auction or bank-owned.
And while there are a lot of signs that the real estate market is improving, those numbers were actually up from 22% during the fourth quarter of 2012 and 25% a year earlier. It is worth noting that the April foreclosure statistics were much improved -- the lowest since July 2007. But we’ll have to wait and see if that’s a blip or part of an improving trend.
Short sales are especially vigorous right now, as banks seek to avoid the cost of foreclosure. Pre-foreclosure sales (many of which are short sales) hit a three-year high in the first quarter. RealtyTrac reported nearly 110,000 short sales in the quarter, comprising 12 percent of all homes sold.
RealtyTrac’s Daren Blomquist, in an interview with Bloomberg, predicted that pre-foreclosure sales will soon outnumber bank-owned sales. Banks, which once avoided short sales like the plague, are now encouraging them as they seek to avoid the costs and long holding times resulting from foreclosure. Bank of America, for example, recently said it will offer payments of $2,500 to $30,000 to sellers if they’ll sell their home in a short sale.
Meanwhile, there are signs of improvement. The Mortgage Bankers Association said this week that the percentage of loans that are delinquent or already in the foreclosure process during the first quarter was 11.33%, the lowest level since 2008. And there are fewer borrowers who are just starting to get into trouble (e.g., those who’ve missed only one payment).