Short sales increased dramatically during the first quarter, rising 25% over year-ago figures and reaching a three-year high, according to foreclosure research firm RealtyTrac.
Homes acquired in pre-foreclosure, generally via short sales, grew 16% from the previous quarter to 109,521 pre-foreclosure sales and increased 25% from the first quarter of 2011.
Transactions involving all distressed property made up a larger portion of the homes sold in the first quarter of 2012 — 26% of all U.S. home sales in 1Q, up from 22% in the fourth quarter of 2011 and 25% from the year-ago period.
The average sales price of a home in foreclosure or bank-owned hit $161,214, down 1% from the previous quarter and down 2% from the first quarter of 2011. The price of homes in foreclosure is 27% below the average sales price of nondistressed home sales for the same month. That figure also is down from the 29% discount on foreclosures experienced in the first quarter a year earlier.
"Foreclosure-related sales picked up in the first quarter, particularly pre-foreclosure sales where a distressed homeowner is selling to avoid foreclosure — typically via short sale," said Brandon Moore, chief executive officer of RealtyTrac.
"Those pre-foreclosure sales hit a three-year high in the first quarter even as the average pre-foreclosure sales price dropped to a record low for our report. Lenders are approving more aggressively priced short sales, which in turn is resulting in more successful short sale transactions."