In the second quarter of 2012, there were 986,355 completed home sales across the United States, according to RealtyTrac. Of those, 22.8% were “foreclosure sales,” which means that homes were either actively in default and in the foreclosure process, or the home already had been foreclosed and belonged to the bank at the time of the sale. While the average price of a nonforeclosure sale was $249,090, the average price of a foreclosure sale was $170,040, a 31.8% discount.
Across the country, one in every 236 housing units received a foreclosure notice or moved forward in the foreclosure process in the second quarter of 2012, RealtyTrac notes. However, the rate was much higher in some areas, such as Riverside, Calif., where one in 68.3 homes are in foreclosure. 24/7 Wall St. reviewed the 10 metropolitan areas with the highest foreclosure rates.
Not surprising, home prices in the metropolitan areas with the highest foreclosure rates have fallen significantly since most of them peaked in 2006 or 2007. The home prices of all the metro areas on this list fell by more than the national average of 33.3% between the first quarters of 2007 and 2012. In five of the 10 metropolitan areas on this list, home prices declined by more than half during that time.
The metropolitan areas on this list are generally in states that have been especially hard hit by the housing downturn. All 10 are located in states that high rates of homes with underwater mortgages. Notably, three of the metropolitan areas are in the California while another three are in Florida. These states had the sixth- and second-highest rates of homes with underwater mortgages, respectively.
Places hard hit by the housing downturn also experienced higher levels of unemployment. As of May 2012, all but one of the metro areas on this list had an unemployment rate higher than the 8.2% national rate. Three of the metropolitan areas on the list had an unemployment rate above 10%. The high unemployment in these areas is serving as a barrier to housing recovery. Home prices in all 10 of these metro areas are expected to drop in 2012, with home prices in all but one of the metro areas expected to fall more than the U.S. decline of just under 1% this year.
24/7 Wall St. reviewed second quarter 2012 RealtyTrac data to determine the metro markets with at least a million residents and the highest foreclosures rates. Of those metro areas, we also reviewed average sale prices for homes, the number of homes in foreclosure and foreclosure sales figures. From Fiserv, we reviewed home price changes through first quarter 2012 and projections from that time. Because Fiserv and RealtyTrac use different geographies, some Fiserv metro areas were approximations, and are not identical sample sizes.
These are the 10 cities with the most homes in foreclosure.