APPLES AND ORANGES
Do foreclosure and short sale homes (distressed) at Lake of the Pines sell for less than regular homes?
Of course they do.
How much less? Let’s examine the “distressed homes” market in Lake of the Pines, California for two different periods:
May 19,2010 through May 18, 2011 compared to the period of May 19, 2011 through May 18, 2012.
I selected “average” houses between 1500 and 2500 square feet that sold during these two periods.
5/19/10 thru 5/18/11 5/19/11 thru 5/18/12
Number of distressed sales 26 13
Number of regular sales 20 30
Highest distressed sold $280,000 $325,000
Highest regular sold $435,000 $405,000
Lowest distressed sold $165,000 $73,000
Lowest regular sold $150,000 $150,000
Average distressed sold $210,025 $184,446
Average regular sold $283,550 $275,171
Median distressed sold $207,500 $169,900
Median regular sold $289,000 $272,500
Average distressed list price $218,759 $196,192
Average regular list price $301,409 $290,341
%sold price/list price distressed 96% 94%
%sold price/list price regular 94% 95%
Price/square foot listed distressed $122 $107
Price/square foot listed regular $157 $150
Price/square foot sold distressed $117 $101
Price/square foot sold regular $148 $142
Average days on market distressed 136 85
Average days on market regular 98 103
Lots of mixed results.
The number of distressed home sales in 2011/2012 (13) was 50% less than it was the previous year in 2010/2011 (26). What happened to the “flood” of foreclosures?
The number of regular home sales in 2011/2012 (30) was 33% more than it was the previous year in 2010/2011 (20).
In 2010/2011 distressed properties were on the market longer than regular sales; in 2011/2012 distressed properties were on the market shorter than regular sales. Go figure.
Consistently, across all types of Lake of the Pines Properties, sellers are getting about 95% of their asking price. But this statistic is deceptive. The original price (the price at which a home first came on the market) and the asking price (the price at which the home was for sale when an acceptable contract was negotiated) are often different. Frequently the price has been reduced, sometimes more than once, so that the asking price is much lower than the original price. When that happens, the %sold price/original price may be much less than 95%.
Distressed properties sell for less money. How much less? A lot less. Distressed markets and regular markets are like two separate realities within the same town. Using “price/square foot sold” as the basis of comparison, distressed homes sold for 21% less than regular sales in 2010/2011 and for 29% less in 2011/2012.
How did distressed sales fare from 2010/2011 to 2011/2012? Again, using “price/square foot sold” as the basis of comparison, prices of “average sized” distressed properties declined 14% in 2011/2012.
How did regular sales fare from 2010.2011 to 2011/2012? Prices of “average sized” regular homes declined slightly in 2011/2012, about 4%.
Fewer distressed homes sold this year than last year, and for 14% less money.
More regular homes sold this year than last year, but for 4% less money.
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