Athens GA Properties, Athens Georgia Homes, and Athens Real Estate

By Jed Smith, Managing Director, Quantitative Research

The Realtors® Confidence Index Survey estimates distressed property sales (foreclosures and short sales) on a monthly basis at the national level.

• The Survey is based on responses from approximately 1,500 Realtors® to an ongoing monthly survey; estimating error is in the neighborhood of 1 percent.
• The November Survey reported that total distressed property sales declined from 49 percent of total sales in March to 33 percent of sales in November.

Foreclosures and Short Sales as Percent of Total Sales

• Realtors® reported that both foreclosures and short sales were selling at prices significantly below the market price for comparable, non-distressed property.
• As of the third quarter of 2009, foreclosed property was reported as sold at a discount of 16 percent below market compared to non-foreclosed properties; short sales properties were reported at a 14 percent discount.

Percent Discount Relative to Market: Foreclosures and Short Sales

• The level of discount for a property relative to the market for non-distressed properties appears to fluctuate from state to state based on market conditions and property status.
• Responses from Realtors® indicate that delays in obtaining lender approvals tend to lower the ultimate sales price. Conversely, in some markets properties that are attractively priced are quickly sold. The physical condition of the property has a major impact on the price discount relative to market.
• In responding to the Survey REALTORS® provide their estimates of the discount to market (if any) and to rank the condition of the property on a scale of 1 (best) to 5 (“bottom 1 percent”). Given that conditions vary widely from area to area and that respondents are using a somewhat subjective ranking, the responses have been combined into three classifications: “average condition or better”, “below average”, and “bottom 1 percent”. In the case of foreclosures, the discount to market widens as property condition worsens. The same holds true for short sales, with the exception of the bottom 1%.

Distressed Property Discount from Market based on Property Condition

Copyright National Association of REALTORS®, Reprinted with permission.

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