Third-quarter U.S. foreclosure sales registered a 21% increase from the previous quarter, with a total of 193,059 properties impacted, according to new data released by RealtyTrac. However, the level of foreclosure sales is down 3% from the third quarter of 2011.
RealtyTrac reports that foreclosure-related sales accounted for 19% of all U.S. residential sales during the third quarter, down from 20% in the previous quarter but at the same level as in the third quarter of 2011. Pre-foreclosure sales increased 22% from the previous quarter and outnumbered sales of foreclosed, bank-owned properties in the third quarter: 98,125 pre-foreclosure sales compared to a total of 94,934 real estate owned sales. Pre-foreclosure sales were also up 22% from the third quarter of 2011.
Foreclosure sales accounted for 38% of all residential sales in Georgia, the highest percentage of any state during the third quarter. However, these sales were down from 41% in the second quarter. Foreclosure-related sales accounted for 54% of all residential sales in Modesto, Calif., the highest percentage of any of the nation's 100 largest metropolitan statistical areas.
‘The shift toward earlier disposition of distressed properties continued in the third quarter as both lenders and at-risk homeowners are realizing that short sales are often a better alternative than foreclosure,’ says Daren Blomquist, vice president of RealtyTrac. ‘However, the scheduled expiration of the Mortgage Forgiveness Debt Relief Act at the end of this year could stifle this trend toward short sales. If that law expires as scheduled, homeowners who agree to a short sale could see their income tax jump significantly because the portion of the unpaid loan balance not covered by the short sale proceeds will be considered taxable income in many cases.’