Foreclosure Sales Fall in Third Quarter

Irvine, CA, Dec. 2, 2010 -- Although foreclosure sales made up a quarter of all home sales in the third quarter, they fell 25% from the second quarter and were down 31% from the third quarter of last year, foreclosure listing firm RealtyTrac Inc. said Thursday.

Sales of non-foreclosed properties fell 29% sequentially and nearly 31% from the third quarter last year, the firm said.

The fallout over foreclosure processing errors that prompted some lenders to temporarily halt sales of bank-owned homes wasn't a significant factor in the sharp third-quarter drop in foreclosure sales, RealtyTrac said.

"We could expect probably in the fourth quarter to see that percentage of foreclosure sales dip because buyers are a bit skittish about purchasing foreclosure properties, given the questions surrounding the foreclosure process," a spokesman said.

The firm has seen a decline in foreclosure activity in November, which suggests a holdover effect from the foreclosure documents mess.

In all, 188,748 U.S. homes in some stage of foreclosure were sold in the July-September period, accounting for a quarter of all U.S. residential property sales.

In 2005, as the housing boom was in full swing, foreclosure sales accounted for just 1% of all sales.