Home Short Sales Jump in U.S. as Banks ‘More Realistic’ on Property Market
By Dan Levy - Aug 25, 2011 12:01 AM ET .
U.S. homes nearing foreclosure accounted for 12 percent of total sales in the second quarter as banks agreed to more transactions at prices below the outstanding mortgage balance, RealtyTrac Inc. said.
The proportion of sales of homes in default or scheduled for auction rose from 10 percent a year earlier and was little changed from the first quarter, the Irvine, California-based information company said today in a report. Most of those were short sales, or transactions for less than the mortgage debt, according to RealtyTrac.
An increase in short sales, along with a shorter average time to sell such homes and bigger discounts relative to normal deals, indicate the market is clearing distressed properties more efficiently, Chief Executive Officer James J. Saccacio said in the statement. Total pre-foreclosure deals rose 19 percent from the first quarter, while slipping 12 percent from a year earlier, when a federal tax credit pumped up demand.
“This is a glimmer of hope that lenders are getting more realistic,” Rick Sharga, senior vice president of RealtyTrac, said in a telephone interview. “It’s a win for borrowers who avoid foreclosure, buyers who get a house in better condition and banks that lose less money, which is also a win for taxpayers.”
Bloomberg.com
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