10 States Where Foreclosures Are On Sale

Last Updated Feb 25, 2011 1:45 PM EST

When you think of the word foreclosure, you automatically think of a home you'll be able to purchase at a steep discount. But when RealtyTrac released its Q4 2010 and Year-End Foreclosure Sales Report this morning, among the many interesting statistics included was a section detailing the ten states offering the deepest discounts on foreclosures and bank-owned REO properties.
In short: In these 10 states, foreclosures are on sale.
  1. Ohio: foreclosure discount 42.76/REO discount 48.13
  2. Kentucky: foreclosure discount 40.48/REO discount 46.61
  3. Tennessee: foreclosure discount 39.49/REO discount 40.08
  4. California: foreclosure discount 39.31/REO discount 46.11
  5. Pennsylvania: foreclosure discount 39.07/REO discount 46.08
  6. Illinois: foreclosure discount 38.63/REO discount 46.29
  7. New Jersey: foreclosure discount 37.87/REO discount 50.46
  8. Michigan: foreclosure discount 37.66/REO discount 41.07
  9. Georgia: foreclosure discount 37.20/REO discount 41.62
  10. Wisconsin: foreclosure discount 35.36/REO discount 42.99
But it's all about the discount. So, how much of a deal are you getting?

Ohio foreclosures, which top the list for value, sold for an average discount of nearly 43 percent in 2010, down from nearly 47 percent in 2009. Kentucky properties, coming in at number two, sold for an average discount of more than 40 percent in 2010, up from nearly 38 percent in 2009.


What's surprising about these numbers is that we're not talking about the states that have traditionally been at the top of the foreclosure list: Nevada (Las Vegas) and Arizona (Phoenix). In Nevada, foreclosures are selling for an average discount of 18.49 percent, while REOs are selling for an average discount of 21.71 percent. In Arizona, foreclosures are selling for an average discount of 25.26 percent, while REOs are selling for an average of 31.32 percent.

Not great, but not nearly half off. Then again, Arizona saw prices fall more than 29 percent from 2009 to 2010, and in Nevada, prices are down 39 percent in the same period.

The eight remaining states posted average foreclosure sale discounts of 35 percent or more in 2010.

Here are some other interesting facts from the year-end report:
  • States on the West Coast such as Nevada, Arizona and California posted the highest percentage of foreclosure sales in 2010, all well above 40 percent of total real estate transactions in their respective states.
  • The report notes a surprising dropoff in fourth quarter foreclosure sales volume nationwide. However, that should not be taken as a sign that the market is losing steam. According to James J. Saccacio, chief executive officer of RealtyTrac "Foreclosure sales in the fourth quarter faced the twin headwinds of the expired homebuyer tax credit -- which began to stifle sales volume during the third quarter -- and the foreclosure documentation controversy, which hit in the fourth quarter and temporarily froze sales of foreclosures from several major lenders Given those factors, it's not surprising that in the fourth quarter foreclosure sales volume hit its lowest level since the first quarter of 2008."
Overall, according to the report:
  • Foreclosure homes accounted for nearly 26 percent of all U.S. residential sales during the year, down from 29 percent of all sales in 2009 but up from 23 percent of all sales in 2008.
  • The average sales price of these foreclosure properties was more than 28 percent below the average sales price of properties not in the foreclosure process -- up from a 27 percent average discount in 2009 and a 22 percent average discount in 2008.
  • A total of 831,574 U.S. residential properties either owned by banks or in some stage of foreclosure -- default or scheduled for auction -- sold to third parties in 2010, a decrease of 31 percent from 2009 and a decrease of nearly 14 percent from 2008.
  • Sales volume of non-foreclosure properties in 2010 decreased nearly 19 percent from 2009 and nearly 27 percent from 2008.
  • A total of 149,303 foreclosure sales were recorded in the fourth quarter, down 22 percent from the previous quarter and down 45 percent from the fourth quarter of 2009 -- despite a 21 percent monthly uptick in foreclosure sales volume in December.
  • Mirroring the year-end statistics, foreclosure sales in the fourth quarter accounted for 26 percent of total sales, and foreclosure properties sold for an average sales price that was 28 percent below the average sales price of properties not in foreclosure.
Does the deep discount data inspire you to purchase a foreclosed property in your state?
Ilyce R. Glink is the author of several books, including 100 Questions Every First-Time Home Buyer Should Ask and Buy, Close, Move In!. She blogs about money and real estate at ThinkGlink.com and The Equifax Personal Finance Blog, and is Chief Content Strategist at RealtyJoin.com, a community for real estate investors.
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    Ilyce R. Glink is an award-winning, nationally syndicated columnist, best-selling book author, and radio talk show host who also hosts "Expert Real Estate Tips," a Internet video show. She owns ThinkGlink.com as well as Think Glink Media, a privately held company that provides consulting, content and video services companies and non-profit organizations.

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