Do foreclosure and short sale homes (distressed) sell for less than regular homes? 

Of course they do.

How much less?  Let’s examine the “sold homes” market in Grass Valley, California for two different periods:

Dec 22, 2010 through May 13, 2011 with the period of Dec 22, 2011 through May 13, 2012.

I selected houses between 1000 and 1500 square feet sitting on parcels less than 1 acre that sold during these two periods.

                                                     12/22/10 thru 5/13/11           12/22/11 thru 5/22/12        

Number of distressed sales                           22                                                    26

Number of regular sales                                 13                                                   15

Highest distressed sold                             $225,000                                      $220,000

Highest regular sold                                  $320,000                                      $300,000

Lowest distressed sold                                 $45,000                                        $55,850

Lowest regular sold                                    $147,000                                      $122,000

Average distressed sold                              $140,140                                      $132,478

Average regular sold                                   $213,223                                      $185,450

Median distressed sold                               $157,500                                      $137,250

Median regular sold                                    $200,000                                     $169,000

Average distressed list price                       $147,770                                      $135,292

Average regular list price                            $221,569                                     $196,213

%sold price/list price distressed                    95%                                               98%

%sold price/list price regular                         96%                                                95%

Price/square foot listed distressed               $118                                              $108

Price/square foot listed regular                    $166                                              $154

Price/square foot sold distressed                  $112                                               $106

Price/square foot sold regular                       $160                                              $145

Average days on market distressed                 78                                                  60

Average days on market regular                      100                                                80

ANALYSIS

No surprises here.  Distressed properties sell quicker and for less money.  How much less?  A lot less.  Distressed markets and regular markets are like two separate realities within the same town.  Using “price/square foot sold” as the basis of comparison, distressed homes sold for 30% less than regular sales in 2010/2011 and for 31% less in 2011/2012.

In my previous blog, we learned that the overall market in Grass Valley, California (based on price/square foot sold) declined from 2010/2011 to 2011/2012 by 7.8%.