Foreclosure concentration, by state (September 2010)The number of foreclosure filings rose 3 percent in September, according to foreclosure-tracking firm RealtyTrac. The term “foreclosure filing” is a catch-all word for housing, comprising default notices, scheduled auctions, and bank repossessions.

September marked the 19th straight month that the number of filings topped 300,000, and the first month in which 100,000 repossessions were logged.

As usual, a small number of states dominated the national foreclosure figures, accounting for more than half of all repossessions.

  1. California : 17% of all repossessions
  2. Florida : 13% of all repossessions
  3. Michigan : 7% of all repossessions
  4. Arizona : 7% of all repossessions
  5. Texas : 5% of all repossessions
  6. Georgia : 5% of all repossessions

Thankfully for home sellers, mortgage servicers appear to be metering the pace at these newly bank-owned homes are made available to the public. RealtyTrac notes that, in doing so, servicers prevent “the further erosion of home prices”.

That said, distressed properties still sell at a steep discount.

In the second quarter of 2010, the average sale price of homes in the foreclosure process was 26 percent lower than the average sale price of homes not in the foreclosure process. It’s no surprise, therefore, that, based on RealtyTrac’s preliminary data, 31 percent of all homes sold in September were “distressed”.

There’s lot of good deals out there, in other words, but they come with certain risks.  Real estate investors are sometimes buying to fix up and resell, and the pace of foreclosures is driving down the sales price of retail purchases also.  In MA and NH, even when you price a finished home below the comps in the area, you can still take a steep discount when it comes to finding a buyer.  They are picky, and they have a lot to choose from.  So be sure you take all your costs into account when making your offers.