Homeowners who had experienced a foreclosure or short sale are starting to return as homeowners, although access to financing is posing a constraint, according to information in the August REALTORS® Confidence Index Survey report.
- About 23 percent of respondents reported working with a buyer who previously experienced a foreclosure or short sale since 2005.
- About 46 percent of responding REALTORS® reported that these buyers they worked with could not obtain mortgage financing.
- In reference to these buyers who did not obtain mortgage financing, 65 percent of respondents reported that the reason was related to the previous foreclosure or short sale.
Distressed property sold at a discount of between 12 to 35 percent of the market value depending on property conditions over the past year, based on information from the March REALTORS® Confidence Index Survey. Not surprisingly, the price discount is affected by the property condition: properties in the poorest condition are discounted at twice the rate of those with above average condition. Currently, about 21 percent of Existing Home Sales are distressed properties.
Foreclosed property in January was reported as selling at a 20 percent discount, while short sale properties sold at a 12 percent average discount according to the January REALTORS® Confidence Index.
- Approximately 24 percent of sales were distressed (foreclosures, short sales), compared to approximately 40 percent in March 2011.
- Property condition has a major impact on sales, with below average foreclosures reported as selling at a 24 percent discount to market, compared to properties in above average condition going for 13 percent below market.
The discount to market is affected by the property’s physical condition. The unweighted average price discount for the period January-December 2012 is about 15 percent for houses in above average condition and about 35 percent for those in the poorest condition.
What this means for REALTORS®: Keep emphasizing the value of good home maintenance to build up home equity and maximize price.
Based on information from the November 2012 REALTORS® Confidence Index Survey, foreclosed property sold on average at a 20 percent discount, while short sale properties sold at a 16 percent average discount.
The discount to market experienced by distressed property is affected by the property’s physical condition. Well maintained properties tend to sell at a lower discount than is the case for properties in poor condition. The unweighted average price discounts to market are presented for the current survey month as well as the 12 month period from December 2011 through November 2012. REALTOR® respondents reported price discounts for distressed houses with above average condition at about 13 to 15 percent, and price discounts of 34 to 38 percent for the properties in the poorest condition.