Foreclosures in Colorado accounted for 35.9 percent of all sales in the second quarter, compared with 31.3 percent for all sales nationally, according to a report released today by RealtyTrac.
The report by the Irvine, Calif.-based company also showed that some parts of Colorado showed gigantic year-over-year percentage increases in foreclosure, although the numbers are extremely small.
Durango, for example, showed a 500 percent increase in foreclosures in the second quarter from the same period in 2010, yet only had 24 foreclosure sales between April and June of this year.
Grand Junction’s 134 foreclosures were 306 percent higher than a year earlier and foreclosures were up 220 percent in Fort Morgan, where a mere 32 sales were tracked by RealtyTrac in the second quarter.
Of 14 metropolitan statistical areas broken out by RealtyTrac in Colorado, there were 4,272 foreclosure sales. The Denver Aurora area accounted for 60 percent of those, with 2,573 foreclosure sales. In the Denver-Aurora MSA, foreclosure sales were down 4.8 percent on a year-over-year basis, compared to a 10.2 percent drop for the entire nation.
Boulder, with 73 foreclosures, showed the biggest percentage drop, falling 48.6 percent from the second quarter of 2010.
Silverthorne, with only nine foreclosures, had the highest average price of a foreclosed sale at $445,916. The national average was $164,217. In the Denver-Aurora MSA, the average foreclosure price was almost identical to the national average at $164,030 in the second quarter, RealtyTrac reported. The average price in Edwards, in Eagle County, was $368,436 for its 20 foreclosure sales, while it was $230,702 in Boulder.
Statewide the average sales price of all foreclosures in Colorado was $170,317 in the second quarter.
U.S. Snapshot
Nationally, foreclosure sales are down from almost 36 percent of all sales in the first quarter, but are up from 24 percent in the second quarter of 2010.
Despite the increase in share of total sales from a year ago, sales of real estate in some stage of foreclosure or bank-owned (REO) properties decreased from a year ago in terms of raw numbers. Third parties purchased a total of 265,087 homes in foreclosure or bank owned nationwide in the second quarter, up 6 percent from a revised first quarter total but still down 11 percent from the second quarter of 2010.
Nationally, the average price of a home in foreclosure or bank-owned was down less than 1 percent the first quarter and down nearly 5 percent from the second quarter of 2010.
“With average prices on distressed real estate trending down and average discounts trending up, this report is clearly good news for well-positioned buyers and investors looking for bargain real estate that will build them wealth in the long term and often cash flow as rental real estate in the short term,” said James Saccacio chief executive officer of RealtyTrac. “Maybe less evident, however, is the good news in this report for distressed homeowners looking to sell, and even lenders saddled with large portfolios of delinquent loans.
“The jump in pre-foreclosure sales volume coupled with bigger discounts on pre-foreclosures and a shorter average time to sell pre-foreclosures all point to a housing market that is starting to focus on more efficiently clearing distressed inventory through more streamlined short sales — at least in some areas,” Saccacio continued. “This gives distressed homeowners who do not qualify for loan modification or refinancing — or who are not interested in those options and want to sell — a better chance of completing a short sale to avoid foreclosure. Streamlined short sales also give lenders the opportunity to more pre-emptively purge non-performing loans from their portfolios and avoid the long, costly and increasingly messy process of foreclosure and the subsequent sale of an REO — which may end up selling for a lower price than it would have as a pre-foreclosure short sale and in the meantime further stresses already overloaded REO departments.”
Contact John Rebchook at JRCHOOK@gmail.com
John:
Could you please clarify if foreclosure sales included in the 36% of all sales in the second quarter are Bank buy backs at auction? I track Larimer County foreclosure sales each week and know that most are Bank Puchases, with very few investors/private sales participating in the auction each week. Of course there are other venues for buying a foreclosure, but my concern is that typical buyers interested in purchasing a “foreclosure” (finding a bargain) read this type of information and get the idea that a whole third of our real estate market is available and readily purchased as a foreclosure. I find that very few articles break down who the purchasers really are and that few private individual buyers have cash and the expertise to do a due diligence prior to putting up that cash at auction. My question more to the point is that I am asking if the 36% sales percentage is a result of actual foreclosure sales or does that percentage include other stages of pre-foreclosure? For instance, an investor buying a distressed property at a discount from the homeowner circumventing foreclosure and then flipping it (or flopping it) back on the market at a higher price?
Thanks for any clarification as I often hesitate to share some of these articles with typical buyers without having to interpret the data in a way that helps them understand that pursuing foreclosures is not for the faint-hearted and cash-light.
Donna, and others who may be interested, here are the answers to what RealtyTrac includes in its data:
1. Pre-foreclosure properties that are sold by the homeowner in foreclosure to a buyer or investor (often via short sale)
2. Bank-Owned (REO) properties that are sold by banks to a buyer or investor
3. oreclosures sold at the public auction to a third-party buyer or investor. RealtyTrac specifically exclude foreclosures “sold” back to the foreclosing bank at the foreclosure sale.
I believe this article and to go further to state it is probably higher as its not accounting back logged/or on the books but not published propeties, or even short sales. Unfortunately this is the market for which we are dealt and consumers truly would love to make these houses a HOME, but in the shape that most of them are in the only alternative is a FHA 203k Renovation Loan or HOMEPATH Renovation Loan or CASH. With limited lenders in the US who have trained loan officers willingly to offer these services little notice goes out about them so clients by AS IS and keep the looks AS IS. This does not sustain our communities when you don’t reinvest in the house you just bought.
In response to Bo’s post. I do offer FHA 203k Streamline Renovation loans some of the time. However, with the Federal Reserve’s new rules on Loan Originator Compensation which says I must make the same percentage amount on every loan I close, I am picky about which renovation loans I do. Why?
These loans are at least twice as much work as a traditional FHA loan, but I don’t get paid any more for doing these loans. Thus, my loan amount needs to be over $200,000 typically for me to want to do one of these loans. This is what is called an unintendend consequence of new federal regulations which the mortgage industry predicted would happen, but the Fed REFUSED to listen to us.
As a first time homebuyer in the market, I think it is interesting that nearly 40% of recent Denver sales have been foreclosures. It gives me comfort that I’m thinking along the lines of many others. I can’t wrap my head around how expensive (and often cheaply built) property seems to be, even post the bubble burst (or, in Denver’s case, a modest 10% downward readjustment). The only way I can justify doing it is to get something at a bargain price. Seems others agree.