Homebuyer tax credit kept REO sales down 28% in 2Q: RealtyTrac
REO sales in the second quarter totaled 151,290, a 28% drop from the year before, as the homebuyer tax credit pushed demand for homes not in foreclosure, according to RealtyTrac, which tracks housing data nationwide. Foreclosure sales took up 24% of all sales, including traditional transactions, in the second quarter. Foreclosure sales is a measurement of how much property is moving out of the shadow inventory of homes depressing market values. A total of 248,534 properties in some stage of foreclosure, either in default, at auction or in REO, sold in the second quarter. That is a 5% increase from the previous quarter and a 20% drop from last year. "Even though foreclosure sales rose numerically, as a percentage of total sales, they were actually down from the previous quarter," Daren Blomquist, the managing editor of the RealtyTrac reports, said. REO sales specifically accounted for nearly 15% of all sales, including traditional sales, in the second quarter, down from 19% earlier in the year and 20% from the second quarter of 2009. James Saccacio, CEO of RealtyTrac, said the sale of homes that have not been in the foreclosure process increased because of the homebuyer tax credit that expired in April. "That had the net effect of lowering foreclosure sales as a percentage of total sales during the quarter, but that may be a temporary dip as the removal of the tax credit could drive more buyers back to discounted short sales and REOs," Saccacio said. Blomquist added that without the homebuyer tax credit, the only incentive left on the mortgage market, besides historically low rates, are the discounts on REO. REO homes sold at an average discount of nearly 35% in the second quarter, the same discount from a year ago. In Nevada, foreclosure sales made up 56% of all home sales in the second quarter, the highest percentage of any state. Pre-foreclosure sales, often short sales, jumped 29% in the state from the previous quarter, but REO sales decreased 14% in the same time, and were down 34% from last year. There were 97,244 pre-foreclosure sales in the second quarter for the entire country, which increased 8% from the previous quarter, a bigger increase than the 5% seen for REO. Foreclosure sales made up 47% of all transactions in Arizona, and 43% in California. Write to Jon Prior.