The average price of a foreclosed home sale in Colorado last year was $186,046, according to a RealtyTrac report released on Thursday.That is about 8 percent higher than the national average sales price of $172,030, according to the Irvine, Calif.-based company that tracks and sells foreclosure data. In Colorado, foreclosures in 2010 accounted for 24.7 percent of all sales, compared with just under 26 percent for the nation. Total Colorado foreclosure sales in 2010 were down 25.4 percent from 2009, compared with a 31.1 percent drop for nation.
Other statistics on how Colorado compared against the nation:
- The average foreclosure discount compared with a market-rate sale was 28.25 percent in Colorado, compared with 20.1 percent for the nation.
- The average REO(Real Estate Owned) discount in Colorado, compared with a non-foreclosure sale, was 32.1 percent, compared with 36.3 percent for the nation.
- The average pre-foreclosure discount in Colorado was 20.47 percent, compared with 15.06 percent for the nation.
In total, there were 17,410 foreclosure sales in Colorado in 2010. Nationwide, there were 831,574, according to RealyTrac.
Passes “smell test”
Overall, the numbers seem to be in the ballpark for the Denver area, said Tom Cryer, a broker with the Kentwood Co.
“I would say it passes the smell test – that is a good way to put it,” Cryer said. He said in the Denver-area market, sales are basically evenly divided between non-distressed homes, foreclosures and short sales. “And short sales are basically foreclosures,” without the legal trappings, Cryer said. A short sale is when a lender agrees to accept less than the amount of the mortgage when the property trades hands.
Ryan McMaken, spokesman for the Colorado Division of Housing, called the report “interesting,” although he does not have the data to evaluate RealtyTrac’s conclusion. However, he noted that the National Association of Realtors reported on Wednesday that 23 percent of all purchases nationwide were made by investors in January, up from 20 percent in December.”That would seem to back up certain aspects of this Realtytrac report which shows increases in homes bought out of some stage of foreclosure,” McMaken said.
Appetite for foreclosures
While it is difficult to draw conclusions from the report, McMaken said it does seem to indicate that the “investment community” is eager to buy foreclosures in Colorado, although with a 32 percent discount that may be considered bad from the seller’s perspective.
One statistic that caught his eye is that in some states, New York for example, only 7 percent of the sales were foreclosures, yet on average they commanded a “huge” discount of 50 percent. Colorado, by contrast, seems to be fairly typical, based on the percentage of foreclosed homes and the discounts, he said.
Nationwide, there were 149,303 foreclosure sales recorded in the fourth quarter, down 22 percent from the previous quarter and down 45 percent from the fourth quarter of 2009 — despite a 21 percent monthly uptick in foreclosure sales volume in December. Mirroring the year-end statistics, foreclosure sales in the fourth quarter accounted for 26 percent of total sales, and foreclosure properties sold for an average sales price that was 28 percent below the average sales price of properties not in foreclosure.
“Foreclosure sales in the fourth quarter faced the twin headwinds of the expired home-buyer tax credit — which began to stifle sales volume during the third quarter — and the foreclosure documentation controversy, which hit in the fourth quarter and temporarily froze sales of foreclosures from several major lenders,” said James J. Saccacio, chief executive officer of RealtyTrac. “Given those factors, it’s not surprising that in the fourth quarter foreclosure sales volume hit its lowest level since the first quarter of 2008.
“Still, foreclosures continue to represent a substantial percentage of all U.S. residential sales and continue to sell at an average sales price that is significantly below the average sales price of properties not in foreclosure — the result of a bloated supply of foreclosures and weak demand from home-buyers,” Saccacio continued. “The catch-22 for 2011 is that while accelerating foreclosure sales will help clear the oversupply of distressed properties and return balance to the market in the long run, in the short term a high percentage of foreclosure sales will continue to weigh down home prices.”
Foreclosure sales by type
A total of 512,886 bank-owned (REO) properties sold to third parties in 2010 — down nearly 32 percent from 2009 — at an average discount of 36 percent, up from an average discount of 33 percent in 2009. REO sales accounted for 16 percent of all sales in 2010, down from nearly 18 percent of all sales in 2009 but still higher than the 13 percent of all sales they accounted for in 2008.
In the fourth quarter, a total of 95,683 REO properties sold to third parties, down 17 percent from the third quarter and down 43 percent from the fourth quarter of 2009. Fourth quarter REO sales accounted for nearly 17 percent of all sales during the quarter at an average discount of nearly 37 percent.