Distressed home sales continue to make up a significant share of all home sales in San Luis Obispo County, according to the latest foreclosure sales report from RealtyTrac, an online marketplace for foreclosure properties.
Homes that were bank-owned or in the pre-foreclosure process, which means they were short sales or sold before the homeowner foreclosed, made up nearly 44 percent of all home sales in the second quarter of this year, down from about half of all sales in the previous quarter.
Foreclosure sales increased 34 percent from the same quarter a year ago. And in terms of raw numbers, there were 443 sales of real estate in some state of foreclosure, an increase of more than 3 percent from the previous quarter.
In a normal market, foreclosure sales account for about 5 percent or less of all sales, said Daren Blomquist, marketing communications manager for RealtyTrac. The fact that nearly 44 percent of all sales are distressed is a sign that the market is still struggling to absorb a high number of these properties.
Digital Access for only $0.99
For the most comprehensive local coverage, subscribe today.
“It will take some time probably our best guess is a couple of years to fully flush out these distressed properties and have the market free and unencumbered of distressed properties,” Blomquist said.
While losing a home can be devastating, distressed properties are attractive buys for many potential homeowners and investors looking for bargains, he said.
The average sales price of homes in foreclosure or bank-owned in the county in the second quarter of this year was $330,567, 23 percent below the average sales price of homes not in foreclosure, according to RealtyTrac.
Blomquist said distressed property inventory is keeping prices down, and there is a possibility that home prices will decline a bit further, although “the expectation is that prices will be more stagnant over the next year or two.”
“Foreclosure sales in and of themselves aren’t a bad thing,” Blomquist said. “These sales are getting homes into the hands of new homeowners who can afford the mortgage and can maintain the property, and that is a good thing.”