Foreclosures represented one in four home sales in 2010

Moving to a distressed property remained a popular choice for many homebuyers last year, according to a new report.

Foreclosed homes represented 26 percent of all home sales in 2010, according to the year-end report from RealtyTrac. While that percentage was down from 29 percent a year earlier, buyers encountered higher discounts on distressed properties compared to ones sold a year earlier In 2010, foreclosed properties cost an average 28 percent less than regular for-sale homes, up from a 27 percent average discount in 2009.

Also, the fourth quarter brought fewer distressed sales, which likely brought down the year total, said experts. However, many of those sales will probably carry over into 2011.

"The catch-22 for 2011 is that while accelerating foreclosure sales will help clear the oversupply of distressed properties and return balance to the market in the long run, in the short term, a high percentage of foreclosure sales will continue to weigh down home prices," explained James Saccacio, CEO at RealtyTrac.

While distressed homes can present buyers with attractive and affordable possibilities, they can also be a riskier venture because they sometimes come in poorer condition than other homes for sale. It's part of the reason 90 percent of Americans say home inspections are a key part of the moving process, according to a survey by the American Society of Home Inspectors.
 

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