Short sale or foreclosure? It depends on where you live
With the argument for the short sale all the rage these days, foreclosures are getting a bad name. But according to data from RealtyTrac, in some markets, it really is better to buy a foreclosure.
The year-end report by RealtyTrac released in February revealed a 6% drop in sold foreclosures during the year.
Even further, foreclosure-related sales accounted for 21% of all U.S. residential sales, while properties not in foreclosure that sold as short sales totaled 22% of all residential sales.
"Short sales are on the rise as a better alternative to foreclosure in many areas — good news for buyers and investors in markets where short sales are closing more quickly at solid discounts," said Daren Blomquist, vice president at RealtyTrac. "But buying from the bank may still be a better option in other markets because of increasing REO inventory, deeper discounts and shorter times to close."
Only markets with at least 200 short sales in the fourth quarter of 2012 were included in the list. In the top 15 markets, the average prices on short sales ranged from $91,145 in Grand Rapids, Mich., to $283,825 in Santa Barbara, Calif.
The top 15 list was exclusively markets with at least 200 bank-owned sales in the fourth quarter where bank-owned sales accounted for at least 10% of all residential sales.
The average sales price of a bank-owned home was at least 30% lower than the average sales price of a non-distressed home in all metros listed.