Real Estate Foreclosures made up 31 pct. of home sales in 2Q

By Derek Kravitz AP Real Estate Writer WASHINGTON (AP) -- Foreclosures made up roughly one-third of all home sales this spring. While that's a smaller share of sales from the previous quarter, it's six times the percentage of foreclosures in a healthy housing market. Foreclosure sales, which include homes purchased after they received a notice of default or that were repossessed by lenders, accounted for 31 percent of the market in the April-June quarter, foreclosure listing firm RealtyTrac Inc. said Thursday. 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 peak two years ago at 37.4 percent. In the second quarter, they declined from 36 percent in the January-March period. In all, 265,087 homes in some stage of foreclosure or owned by banks were sold in the second quarter, down 11 percent from the same period a year ago. Sales of all other types of homes also declined, according to RealtyTrac's figures, which differ from other home-sales estimates. Bank-owned homes, which are sold after being repossessed, accounted for nearly 19 percent of all sales. That's unchanged from the previous quarter. Distressed properties, often in need of repair, typically sell at big discounts and weaken prices for neighboring homes. A bank-owned home this spring sold for 40 percen less than the average price of other homes, according to RealtyTrac. That's up from 36 percent in the previous quarter and 34 percent from the same quarter one year ago. Published: Fri, Aug 26, 2011