This is an archived article that was published on sltrib.com in 2011, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.
Nearly one-fifth of all home sales in Utah last year were foreclosures, a new report shows.
The state's share of distressed property sales, 19.7 percent, is lower than many other states, including neighboring Nevada (57.4 percent), Arizona (49.2 percent), Colorado (24.7 percent) and Idaho (28.4 percent).
Nationally, foreclosed homes accounted for nearly 26 percent of all U.S. residential sales, according to a report by RealtyTrac, which tracks foreclosures nationally.
In a normal market, foreclosures typically account for 1 percent to 5 percent of the home-sale market, said Daren Blomquist, managing editor of the RealtyTrac. Even though foreclosures are a smaller share of overall home sales in the state, "19 percent is still abnormally high," he added.
The report shows that Utah's housing market hasn't been immune to the national real-estate downturn, said Utah economist Jeff Thredgold, a consultant with Zions Bank. "But we'd rather have our numbers than Nevada, Arizona, Florida, California, where prices are off as much as 40, 50, 60 percent, and foreclosures are in every neighborhood," he said. "You can look at subdivisions in Tucson, Phoenix, Las Vegas and seemingly every third or fourth house is a foreclosure for sale. It's a serious problem in Utah, but it pales to some of those other markets."
Nationwide, 831,574 residential properties either owned by banks or in some stage of foreclosure — from loans in default to those scheduled for auction — sold last year, down 31 percent from 2009. In Utah, 8,067 properties were sold last year, down nearly 20 percent from 2009.
Foreclosure sales declined in the latter half of last year because of the expiration of federal home buying incentives. Also pushing sales lower was the foreclosure documentation controversy that began late last year and prompted a number of lenders to temporarily freeze sales of foreclosed properties.
"Still, foreclosures continue to represent a substantial percentage of all U.S. residential sales and continue to sell at an average sales price that is significantly below the average sales price of properties not in foreclosure — the result of a bloated supply of foreclosures and weak demand from homebuyers," RealtyTrac CEO James J. Saccacio said in the report.
Nationally, the average sales price of foreclosure properties was more than 28 percent below the average sales price of properties not in the foreclosure process. In Utah, however, foreclosure properties sold at a 0.22 discount, according to the report. It was the only state other than Montana that did not have a double-digit selling discount among foreclosures.
RealtyTrac's Blomquist said Wednesday he wasn't sure why there was virtually no difference in Utah between the selling price of foreclosures and properties that aren't in foreclosure.