Foreclosures made up roughly one out of every eight home sales this spring in New Mexico, compared to one in every three sales nationwide, according to a new report.
The state had 608 foreclosure sales, which include homes purchased after they received a notice of default or were repossessed by lenders, in the April-June quarter, a small increase from the first quarter but a 14 percent drop from the second quarter of 2010, RealtyTrac Inc. said Thursday.
Foreclosure sales accounted for 13 percent of all home sales in New Mexico the second quarter, which was the ninth-lowest ratio of foreclosure sales to total home sales among the 50 states. The national average was 31.3 percent of all home sales.
The share of the market would likely have been larger this spring if not for a state and federal investigation into faulty paperwork by banks and servicers. The probe has led many banks to delay foreclosure sales. Once that is complete, foreclosures will likely surge later this year.
As a slice of all home purchases, foreclosure sales peaked nationwide two years ago at 37.4 percent.
Distressed properties, often in need of repair, typically sell at discounts and weaken prices for neighboring homes.
A bank-owned home this spring sold for 5.7 percent less in New Mexico and 40 percent less nationwide than the average price of other homes, according to RealtyTrac.
Sales of homes in the foreclosure process — or short sales — went for 15.2 percent less in New Mexico and 32 percent less nationwide than the average home sold, the firm said. A short sale is when the lender agrees to accept less than what is owed on the mortgage.
Nevada led all states with foreclosure sales, accounting for 65 percent of all home sales, RealtyTrac said. In Arizona, foreclosure sales represented 57 percent of all home sales for the quarter, up 16 percent from a year ago. In California, foreclosure sales accounted for 51 percent of all home sales in the second quarter, virtually unchanged from last year.
Several other states had foreclosure sales that accounted for at least one third of all home sales in the first quarter: Michigan, Colorado, Florida, Illinois and Oregon.