A new study that investigates the prevalence of foreclosure sales and the depth of discounts in 629 counties in 36 states was released last week by First American Real Estate Solutions, a provider of property and ownership information, analytics and services.
The study, “Residential Foreclosures: The Prevalence, the Power and the Opportunity,” written by Christopher Cagan, Ph.D., director of research and analytics at First American Real Estate Solutions, quantifies the correlation between foreclosures as a percentage of total sales and the size of the discount buyers typically receive when purchasing foreclosure properties.
For example, in Maricopa County, Ariz., where foreclosure sales accounted for 1.6 percent of total sales during the first half of 2005, the median discount was 6.3 percent. Whereas in St. Louis, Mo., foreclosures made up 7.9 percent of sales for the same time period, with a median discount of 29.5 percent.
“The prevalence of foreclosures and the depth of discounts are sensitive indicators of the present and future state of a real estate market, regardless of geographic location or market type,” said Cagan.
Among the areas with few foreclosure sales and little or no foreclosure discounts during the first half of 2005 were California, the District of Columbia, Hawaii, New Mexico, Virginia, Nevada, Florida and Arizona. States where foreclosures were most prevalent and discounts were deepest included Michigan, Missouri, New York, Ohio, South Carolina and Tennessee.
“Our clients are seeking advanced analytics to respond to trends, often in multiple markets,” said George Livermore, president of The First American Corporation’s Property Information and Services Group. “This comprehensive, nationwide analysis helps businesses identify areas where foreclosures are more frequent, and that helps them make more informed decisions.”
Electronic copies of the study are available at FirstAmRes.com.
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