This just in… There’s a three-year inventory of homes in foreclosure for sale. Las Vegas has so many foreclosures that 53% of all the homes sold in Nevada are in some stage of foreclosure. Foreclosures represent 45% of sales in California and Arizona, and 28% of all existing home sales during the first three months of 2011.
What’s more, the homes are selling at steep discounts, especially REOs, bank-owned homes that have been taken in foreclosure procedures. The average REO cost on average about 35% less than comparable properties.
But in some areas, the discounts were ever greater: In New York State, the discount for REOs was 53% during the first quarter. And it was nearly 50% in Illinois, Ohio, and Wisconsin.
Also weighing on market prices are “short sales,” homes where the selling price is less than what is owed by the borrowers. These sales sold at an average 9% discount. Including both REOs and short sales, Ohio had the biggest discount of any state, at 41%.
There were 158,000 deals involving distressed properties nationwide during the first quarter, at the current pace it will take three years to burn through the inventory of 1.9 million distressed properties.
