Short sales of homes hit 3-year high in 1st quarter of '12

6/10/2012

LOS ANGELES -- The number of U.S. homes purchased via short sale hit a three year-high in the first quarter of 2012, up 25 percent from a year earlier, according to a report on foreclosure-related sales.

Owners unloaded 109,521 homes during the first three months of the year for less than what they owed on the mortgage, according to Irvine, Calif.-based data tracker RealtyTrac. Such transactions help homeowners avoid having their properties repossessed by lenders, which must approve the sales.

Short sales made up 12 percent of all residential sales during the quarter, commanding an average price of $175,461, a record low.

"Financial institutions are aggressively seeking to move through their inventories of homes in default or scheduled for auction," said Stuart Gabriel, director of the Ziman Center for Real Estate at the University of California-Los Angeles. "This is a positive sign in the sense that clearing out this shadow inventory is a precondition for the full healing of the housing sector."

The number of bank-owned homes sold slipped 15 percent from the year-earlier period to 123,778 units. Those properties sold for $147,995 on average.

Out of all U.S. homes sold during the first quarter, 26 percent -- or 233,299 properties -- were in some stage of foreclosure, according to RealtyTrac. That's slightly more than the 25 percent of sales in the same situation a year earlier.

California has the second-highest percentage of foreclosure sales in the country, with 47 percent of home sales falling into the category. Nevada is the highest with 56 percent; Georgia is third with 46 percent.

Compared with the fourth quarter, sales of homes in default, set for auction or owned by banks were up 8 percent nationally but flat from a year ago.

At an average $161,214, such properties sold at a 27 percent discount compared with an average nonforeclosure home.

Santa Ana, Calif., research firm CoreLogic reported recently that the number of homes struggling through foreclosure held steady in March from February and fell from the year-earlier period.