Fewer bank-owned homes and properties in foreclosure sold in the first three months of 2010, according to a report released Tuesday. But experts said the nation's housing market will remain troubled for years to come.
A total of 232,959 U.S. homes that sold in the first quarter were either bank-owned or in some stage of the foreclosure process. That's a 14% decrease from the prior quarter and a 33% decline from a peak in the first quarter of 2009, according to Irvine-based RealtyTrac.
Those distressed properties made up 31% of all previously owned homes sold in the U.S. in the first quarter, RealtyTrac said. And while the number of homes sold in foreclosure has declined this year, the housing market probably won't return to a more normal state until the second half of 2013 as foreclosure activity by banks remains elevated, said Rick Sharga, RealtyTrac senior vice president.
"It is a much longer recovery cycle than we have seen in housing," Sharga said. "But the boom was also unprecedented."
In California, 59,823 distressed homes sold in the first quarter, a 21% decline from the prior quarter and a 47% drop from the first quarter of 2009. In Los Angeles County, 10,823 distressed homes sold, a 22% decline from the prior quarter and a drop of 41% from the first quarter of 2009.
Prices of foreclosed homes are getting slightly cheaper. The average sale price for a foreclosed home in the U.S. was $171,971 in the first quarter of 2010, a 1% decline from the fourth quarter of 2009 and a 3% decline from the first quarter of 2009.
More housing inventory from foreclosures probably is on the way. Although fewer people appear to be entering foreclosure, banks stepped up their repossession of homes at a record pace in the first quarter, according to RealtyTrac.
The rise in property seizures by banks was attributed to the expiration of several moratoriums on foreclosures last year and the failure of the Obama administration's effort to provide widespread permanent mortgage relief for borrowers.