Discount and Distressed Marketshare Decline


Realtors across the country are reporting a dearth of foreclosures and short sales in their markets, according to latest Realtor Confidence Index survey by the National Association of Realtors, a sign that lenders have not yet released large volumes of backlogged foreclosure inventory by the end of March, when the survey was conducted.

Fewer numbers of foreclosures and short sales also accounted for a decline in the distressed sale market share in March.  March foreclosures fell to 18 percent from 20 percent of all sales in January and  March short sales fell to to 12 percent from 14 percent in January.

Despite the smaller inventory, the median discounts fell as well, a sign of increasing stability in markets across the country.   Foreclosures have been selling at approximately 20 percent below market and were at 18.8 percent as of March 2012.  Short sales have been selling at approximately 15 percent below market: 15.8 percent as of March 2012.

About Author

Steve Cook is the editor of Real Estate Economy Watch and writes for a several leading outlets in addition to BiggerPockets, including Equifax and Total Mortgage. He also provides communications consulting services to leading real estate companies. Previously he was vice president of public affairs for the National Association of Realtors.


    • Hi Karen,
      Thanks for your comment.
      It’s interesting to note that the same NAR survey I cited that found discounts down and investor market share declining also reported greater confidence that prices and real estate markets would improve this year. However, first time buyers, generally a measure of confidence in the market, were not more active. In fact, yesterday NAR reported an overall drop of 2.1 percent in existing home sales, attributed largely to the disappearance of investors from the markets. (see Foreclosure Drought and Declining Discounts Depress Investor Sales on today’s Real Estate Economy Watch.)
      As more and more local markets stabilize, discounts on REOs and short sales will continue to shrink below 20 percent, making it harder to find bargains. One expert, Alex Villacorta at Clear Capital, predicts about 20 percent of major market will stabilize this year.

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