Banks are slashing the asking prices of homes with delinquent loans to their lowest levels in at least seven years, making it easier for homeowners to get out from under troubled mortgages and more appealing for homebuyers to snap up properties at a discount. The number of short sales could top foreclosure sales as early as this quarter.
"Lenders are more aggressive about short sales, and they're more realistic about the price they need to set to get them sold," says Daren Blomquist, vice president at RealtyTrac, an online marketplace for foreclosure properties based in Irvine, Calif.
Lenders sold off 109,521 residential properties through short sales in the first quarter, according to a RealtyTrac report released Thursday. That's up 25 percent from the same period a year ago. Lenders unloaded 123,788 properties through foreclosure sales in the first quarter, down 15 percent from a year ago.
Nationally, the average price of a home in a short sale was $175,461 in the first quarter, down 4 percent from the fourth quarter and down 10 percent from the first quarter of 2011, according to RealtyTrac. That's a record low for the seven years that the company has been tracking the price. In 2006, at the peak of the real estate boom, the average short sale home sold for $293,595 (click on the chart above left).
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