New figures released Thursday show the nation’s glut of foreclosed homes is gradually being flushed out of the system — fueling a rise in home prices across the country.
RealtyTrac, a real estate website that tracks the industry, found the number of foreclosures sold in the first quarter of this year declined 22 percent from the same period last year, and was down by 18 percent from the previous quarter.
According to the report, there were more than 190,000 foreclosures sold between January and March this year, down from the more than 231,000 foreclosures that were sold during the previous quarter and the more than 240,000 sold during the first quarter of 2012.
Overall, only about one in five homes sold during the first quarter were foreclosures — still higher than real estate experts would like, but an improvement over the one in four homes sold in the same period in 2012.
“The big picture here is that distressed sales are having less of an impact on local real estate markets,” said Daren Blomquist, vice president at RealtyTrac. “When you have a foreclosure property in your neighborhood that is selling at a discounted price, that’s when it affects the value of your home.”
Foreclosures typically sell for about 30 percent less than the average home that is not in distress, but because there are fewer foreclosures available for sale, that discount is having less effect on the market, Mr. Blomquist explained.
“If you want to sell your home, buyers looking at your home would compare it to that foreclosure down the street, often at a discounted price point,” he said.
In the Washington area, the real estate market enjoyed even better results — though Maryland continues to struggle.
Foreclosures here were down 29 percent from the same period the previous year and were virtually flat from the previous quarter. Only about 13 percent of homes sold in the region were foreclosures, which is one-third lower than the national level, meaning distressed sales will have less of an impact on the market.
In Virginia, foreclosure sales during the first quarter declined 14 percent from the previous quarter and 39 percent from the previous year. That means homes prices in Virginia are likely to continue to go up.
The real estate market in Maryland though, is mixed, with much of the state still dealing with a glut of foreclosures, Mr. Blomquist said.
Many of those delayed foreclosures are just beginning to hit the market — a painful but necessary step for the real estate market to improve over the long haul.
Foreclosures there increased 16 percent from the previous quarter and 14 percent from the previous year.
According to CoreLogic, an Irvine, Calif.-based analysis firm that also tracks foreclosures, U.S. foreclosure inventory declined 2 percent in April from March to hit about 1.1 million homes.
Compared with April 2012, there were 24 percent fewer U.S. homes in some stage of foreclosure.