Sales of Hawaii homes that were in foreclosure slowed in the first three months of the year, but their impact on the state’s housing market remained relatively high, a new report released today shows.
There were 362 homes in foreclosure that were sold during the first quarter, which was down 25 percent from 480 sales in the same period last year, according to the report from RealtyTrac.
However, because there were fewer home sales overall, the share of foreclosure sales rose.
Foreclosure property represented 13.7 percent of all first-quarter home sales, or about one out of seven sales. A year earlier, the figure was 12.4 percent, or about one out of eight sales.
It’s unclear how much of the decline in foreclosure sales may be due to a pullback in foreclosure cases or reduced demand from buyers.
A new law requiring lenders to follow new foreclosure procedures and giving homeowners more options to avoid foreclosure was enacted this month, so it had no direct impact on first-quarter foreclosure sales.
During the quarter, the number of foreclosure filings declined 22 percent. Local foreclosure attorneys attribute the reduction to lenders holding back cases after their loan documentation practices were called into question.
Also during the quarter, overall home sales in Hawaii declined, according to RealtyTrac.
Foreclosure sales have a unique impact on the housing market, in some ways helping attract buyers but also generating downward pressure on prices.
Homes in foreclosure sold for an average $322,317 in the first quarter, according to the report. RealtyTrac said that was 18 percent less than the average for all nonforeclosure home sales.
In the first quarter of 2010, the average discount on foreclosure sales was 15 percent.
The discount, however, is influenced by a variety of factors including the condition, size and location of homes sold, which muddies the comparison between foreclosure and nonforeclosure property values.
RealtyTrac counts two types of foreclosure sales — homes in foreclosure that are sold by homeowners before a foreclosure auction, and homes sold by lenders either at auction or afterward.
Most foreclosure sales in Hawaii during the first quarter were by lenders. A year earlier, most were by homeowners.
Of the 362 sales in the recent quarter, 245 were by lenders. That was up 18 percent from 207 lender sales in the year-earlier quarter.
Homeowners made 117 sales in the first quarter, down 57 percent from 273 sales a year earlier.
RealtyTrac reported data on foreclosure sales from 38 states, but did not have sufficient data for 12 states.
Of the 38 states, 27 had a larger share of foreclosure sales among all home sales compared with Hawaii’s
13.7 percent. The average for 38 states was 27.5 percent, or one for every 3.6 home sales.
In Hawaii, the share of foreclosure sales was greatest on Maui and Kauai, at
29 percent and 25 percent of all home sales, respectively, in the first quarter. On Hawaii Island and Oahu the figure was about 9 percent.