Number of Bank-Owned Sales Increased as Average Sales Price Fell - 8 News NOW

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Number of Bank-Owned Sales Increased as Average Sales Price Fell

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The subprime home loan debacle became readily apparent in 2007 but it wasn't until 2008 that the number of short sales by Clark County homeowners already in default began to skyrocket.

RealtyTrac.com reports 1,645 short sales in the first quarter of 2008, nearly double the prior quarter. But that was only the beginning. The next four quarters, those numbers rose to 2,471, 4,073, 7,823 and 9,622 before declining.

Noteworthy is that short sale prices fell off the cliff, even more so than the housing market in general because buyers usually could get double-digit discounts from distressed homeowners versus sellers that weren't in foreclosure. In the first quarter of 2006, when housing prices were in their prime, the average short sale fetched $367,876. But from April through June this year the average sales price was a mere $124,702, more than 16 percent below the sales price of homes not in foreclosure.

The number of bank-owned home sales, which was microscopic in 2005 and 2006, rose from 120 in the second quarter of 2007 to 812 in the fourth quarter of 2007. The number continued to skyrocket, reaching a peak of 9,396 in the second quarter of 2009 before tailing off a bit. Like short sales, the average prices banks got for homes nosedived from $332,306 in the third quarter of 2006 to $115,604 from April through June 2011.

But the volume of short sales those three months reached its highest point since the first quarter of 2009, and the number of housing units sold by banks also was at its highest level since the fourth quarter of 2009.

Also noteworthy is that more than 66 percent of all housing units sold in Clark County in April through June 2011 were short sales or bank sales. Back in the first quarter of 2005, when economic times were good, that figure was roughly one-quarter of 1 percent.

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