Disappointment is a likely outcome for house hunters looking for bargains in foreclosure-related home sales in New Mexico.
The average discount in price for buying a home somewhere in the foreclosure process was 7.3 percent in 2012, the only single-digit price discount among the 50 states, according to a new report from Irvine, Calif.-based RealtyTrac.
The next lowest price discounts were 16 percent in Utah and 19 percent in Nevada.
The average discount nationwide was 31 percent in 2012.
The highest price discounts were 48 percent in Massachusetts and 46 percent in Connecticut.
The lack of a big price difference between a foreclosure-related home sale and a regular home sale is indicative of stagnant home values in the broader housing market and a concentration of buyer interest in homes priced at the lower end of the market.
There were 2,515 foreclosure-related sales in New Mexico in 2012, a 12 percent increase from 2,054 in 2011, RealtyTrac reported. Nationwide, foreclosure-related home sales dropped by an average of 6 percent from 2011 to 2012.
Foreclosure-related sales – either bank-owned home sales or short sales of homes in the foreclosure process – accounted for about 13 percent of all home sales in New Mexico last year, compared to 8.6 percent in 2011 and 8 percent in 2010.
Nationwide, foreclosure-related sales accounted for an average of about 21 percent of all home sales, down from 23 percent in 2011 and 26 percent in 2010, RealtyTrac data shows.
Foreclosure-related sales are one of two major components of the distressed housing market.
The other major component is short sales that don’t involve homes in the foreclosure process. These short sales are typically negotiated between the homeowner in default and the lender.
Nationwide, non-foreclosure short sales accounted for an estimated 22 percent of all home sales. Add foreclosure-related home sales and non-foreclosure short sales together, then about 43 percent of all home sales nationwide were distressed properties.
RealtyTrac does not have data on non-foreclosure short sales in New Mexico. If the state follows the national pattern, however, then the 13 percent market share for foreclosure-related home sales could be doubled to come up with a rough estimate of 26 percent for total distressed property sales.
— This article appeared on page B01 of the Albuquerque Journal