In their first U.S. Foreclosure Sales Report, RealtyTrac reported that 31% of all residential home sales in the first quarter of 2010 were in some phase of the foreclosure process. These include homes for sale in default, where an NOD had been filed by the lender, or those that were already taken back by the bank and labeled “REO” or Real Estate Owned.

In comparison, the percentage of homes sold in the first quarter of 2009 that were in the foreclosure process sat at 37%. More than 1.2 million U.S. properties that sold in 2009 were in some stage of the foreclosure process.

On average, buyers who purchased a home for sale in a foreclosed status paid 27% below the average sale price of properties that were not in a distressed status.

The report noted that “Discounts on REOs are larger than discounts on pre-foreclosures, although discounts on pre-foreclosures appear to be trending higher as short sales become more common.”

There are a couple of points to keep in mind as you look at these numbers:

• The statistics reflect a large area: the entire country or an entire state. They are not broken down by County or City.
• In California, for example, the number of distressed properties in the Inland Empire where there was a large amount of investment owned properties, was higher than in some of the coastal areas such as Laguna Beach.
• In areas where there was a high percentage of vacant, REO homes and those in foreclosure, the banks may have been more motivated to close the sale on the property so that their exposure in the area was lessened.
• It may have been more financially beneficial to use the government TARP money to make deals in these higher-risk areas.
• The number of REOs may decrease in future reports. Lenders have indicated that they are more inclined to work with a short-sale home for sale  situation than to take on all the added costs involved in an REO, such as attorney fees.
• Sellers of non-distressed properties are becoming more educated about their need to price their homes according to where the market is today, not what it was a couple of years ago. Many realize that they are competing with distressed properties for buyer’s money. So, keep your eyes on both “regular” and distressed properties. After all, a good price is a good price, no matter what the situation of the seller!

 Read the full report:

In another, related report, the top 50 cities were listed that had the greatest price reductions…Orange County Homes and Laguna Beach Real Estate were not on that list! On average the top 50 areas included saw average reductions from 7%-26%. The city with the most drastic reductions, which is really no surprise, was Detroit. No ocean view there!

One note to keep in mind as you look at price reductions. There are always 2 reasons for the price reductions. 1) Economically, the market has determined that the home is worth less than what seller has priced it at and 2) The seller decided to initially price the home at a higher rate than what the current market deemed appropriate – this is more a case of seller denial of current market conditions rather than an indication of overall market conditions.

It’s a very slight difference in perception, so just be sure that you don’t simply get caught up in the statistics and numbers. They can be used as a guide, but in the end, what you determine to be the perfect home and the perfect price is up to you.

As always, I invite you to allow me help you with any questions that you have. Those that have worked with me know that I’m a no B.S. straight shooter. If a home that you are interested in is overpriced – I will tell you. Similarly, if a great deal is out there I will enthusiastically share it with you!

Just Contact Me!

Until next time…

Currently, there are 22 Homes available in the Emerald Bay community. Since the beginning of the year, there have been 7 completed home sales in this area.

Located just north of Laguna Beach, California, the premier community of Emerald Bay has evolved from what was once a quaint beach destination to being recognized as one of the most sought-after private communities in Orange County.

There are homes in Emerald Bay to fit most every taste. Premier properties can be found in styles such as French Provincial, Country French, Hawaiian Plantation, Tuscan, Mediterranean, Contemporary, English Manor, or Quintessential Laguna Beach Cottage.

Many of these homes for sale in Emerald Bay offer breathtaking views of the ocean, bay, Catalina Island, Sunsets, White Water, Canyon, Hills, Panoramic view. Imagine ending each day in an Emerald Bay home destination with the smell of Pacific Ocean breezes and the inspiring sights of another West Coast sunset.

This inclusive community has 524 single-family residences and is bordered with hillsides to the east, the Pacific Ocean to the west, and naturally defined coastal promontories to the north and south. Residents enjoy a sense of intimacy and privacy in this seaside coastal retreat.

The community amenities enhance life in Emerald Bay. These include: 14 acres of private parks, a private beach, community center, the Al Simmons swimming pool complex, 6 well-maintained hard tennis courts, a tennis pro shop, beach volleyball courts, guard-gated entry and 24-hour security patrol. Community activities can also be enjoyed which include exercise classes, kid’s programs, concerts in the park and adult trips throughout the year.

As always, if I can assist you in any way, please contact me.

Until next time…