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Press release from PR Newswire

Foreclosure Discount Falls to 7.7 Percent Nationally

Friday, November 09, 2012

Foreclosure Discount Falls to 7.7 Percent Nationally08:00 EST Friday, November 09, 2012Pittsburgh and Cleveland Metro Areas Top List of Highest Bank-Owned Foreclosure Discounts, According to Zillow AnalysisSEATTLE, Nov. 9, 2012 /PRNewswire/ -- Homebuyers nationwide in September could expect a discount of 7.7 percent when buying a bank-owned property versus the same home in a non-distressed sale, according to a new Zillow® analysis.The discount narrowed from 9.1 percent during the same month last year and has fallen dramatically from a peak national discount of 23.7 percent in August 2009. Zillow compared the actual sale price of foreclosed homes nationwide to the estimated price of the same home were it to sell in a non-distressed transaction.While foreclosure sales continue to offer buyers discounts over traditional sales in the majority of metro areas, some of the areas hardest hit by foreclosures are also those where the price gap between foreclosed and non-foreclosed homes is the smallest. Areas with the smallest foreclosure discounts in September were Phoenix (0 percent), Las Vegas (0 percent), Sacramento, Calif. (0.7 percent) and Riverside, Calif. (1.8 percent), Zillow found. "The smallest foreclosure discount is found in places where competition for homes is so high, people there are willing to pay the same amount for a foreclosure re-sale that they would for a non-distressed home simply to take advantage of historic affordability," said Zillow Chief Economist Dr. Stan Humphries. "Additionally, in areas such as Phoenix and Las Vegas, where not long ago one out of every two homes sold was a foreclosure re-sale, buying a foreclosure is no longer just for investors."   Metro areas with the biggest foreclosure discounts include Pittsburgh (27.4 percent), Cleveland (25.8 percent), Cincinnati (20.2 percent) and Baltimore (20 percent). Year-over-year foreclosure discounts fell in roughly three-quarters (76.9 percent) of metro areas analyzed, and all metros are down from their peak. Nationwide, foreclosure discounts reached their height in 2008 and 2009, and in some areas peaked at more than 30 percent.Foreclosure Discount (current)Foreclosure Discount (Sept. 2011)Peak Foreclosure DiscountForeclosure Discount Peak Month(Month/Year)Foreclosure Re-sales Percenti(Sept. 2012)United States7.7%9.1%23.7%September 200913.4%New York, NY15.5%18.7%30.3%August 2009--Los Angeles, CA4.2%9.7%24.8%August 200917.1%Chicago, IL11.9%15.5%28.0%December 2008--Philadelphia, PA14.4%18.6%27.0%August 20096.6%Washington, DC5.5%8.2%22.2%October 20088.6%Miami-Fort Lauderdale, FL2.9%6.8%22.7% August 2008--Atlanta, GA7.8%13.5%28.0%October 2008--Boston, MA15.1%16.5%29.1%December 2008--San Francisco, CA4.7%8.9%20.4%January 200815.8%Detroit, MI15.2%16.5%30.0%April 2008--Riverside, CA1.8%6.0%24.7%July 200926.6%Phoenix, AZ0.0%4.3%23.3%Jun-200917.6%Seattle, WA6.8%11.6%20.2%August 20099.0%Minneapolis-St Paul, MN13.9%13.0%28.2%July 200912.8%San Diego, CA2.4%8.4%20.7%August 200913.6%Tampa, FL9.0%9.6%29.1%November 2008--Baltimore, MD20.0%13.0%26.9%August 20097.5%Denver, CO6.4%11.1%28.6%June 200913.9%Pittsburgh, PA27.4%23.8%35.3%November 20097.5%Portland, OR8.4%9.0%21.2%September 200910.7%Sacramento, CA0.7%5.2%20.3%June 200920.8%Orlando, FL4.6%2.0%24.4%January 2010--Cincinnati, OH20.2%18.1%30.6%April 20089.6%Cleveland, OH25.8%23.1%34.1%August 200919.9%Las Vegas, NV0.0%3.0%24.1%October 200421.5%Charlotte, NC15.1%19.1%27.7%February 200913.0%By comparing the sale price of a foreclosure to the estimated, non-distressed sale price of the same home, Zillow has taken a new approach to answering the question, "How much can I save by buying a foreclosure?" Other reports compare the median sale price of all foreclosures sold in a given period with the median sale price of all non-foreclosures sold in the same period ? an approach that does not control for issues such as size, location or other attributes of homes. Because foreclosed homes tend to be smaller and in lower-priced locations, prior research tends to overstate the discount on foreclosures relative to non-foreclosures. Zillow's approach controls for those issues.About Zillow, Inc.Zillow (NASDAQ: Z) is the leading real estate information marketplace, providing vital information about homes, real estate listings and mortgages through its website and mobile applications, enabling homeowners, buyers, sellers and renters to connect with real estate and mortgage professionals best suited to meet their needs. More than 36 million unique users visited Zillow's websites and mobile applications in October 2012. Zillow, Inc. operates Zillow.com®, Zillow Mortgage Marketplace, Zillow Mobile, Postlets®, Diverse Solutions®, Zillow Rentals and Buyfolio?. The company is headquartered in Seattle.Zillow.com, Zillow, Postlets and Diverse Solutions are registered trademarks of Zillow, Inc. Buyfolio is a trademark of Zillow, Inc.i The foreclosure re-sale percentage is the percentage of home sales in a given month in the given area where the home was foreclosed upon within the previous 12 months (e.g., sales of bank-owned homes after the bank repossessed a home during a foreclosure).SOURCE ZillowFor further information: Alison Paoli, Zillow, +1-206-757-2701, press@zillow.com