A significant sector of the housing market is still being driven by sales of bank-owned homes and those in some stage of foreclosure, according to a report out Thursday from Realtytrac.
Sales of bank-owned homes and foreclosure properties accounted for 28% of all U.S. residential sales in 1Q11, up slightly from 27% in 4Q10, the report said.
Prices for foreclosed properties are dropping slightly. The average sales price for properties in some stage of default was $168, 321, down 1.89% from 4Q10 and down 1.46% from the first quarter of 2010.
Despite the significant amount of foreclosure sales, the large amount of foreclosures and repossessed homes still on bank balance sheets is still hampering a housing recovery, according to RealtyTrac CEO James Saccacio.
"While foreclosure sales continue to account for an unusually high percentage of all residential home sales, sales volume is well off the peak we saw in the first quarter of 2009, when nearly 350,000 foreclosure properties sold to third parties," Saccacio said in a press release. "While this is probably helping to keep home prices relatively stable, it is also delaying the housing recover. At the first quarter sales pace, it would take exactly three years to clear the current inventory of 1.9 million properties already on the banks' books, or in foreclosure."