Key Highlights

  • Median price of Real Estate Owned (REO) properties taken over by lenders stood at -36% less than typical price of all homes sold in Q3 2020
  • Discount on foreclosed properties varies from state to state
  • Deepest discounts on foreclosed properties in Midwest and South

Buyers/investors nationwide willing to take on the risks of purchasing a foreclosed or real estate owned (REO) property typically get a discount of approximately one-third of the price  non-REO properties typically sell for. In Q3 2020, according to ATTOM Data Solutions, that REO discount improved to 36% for the fourth consecutive month.

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According to ATTOM, the median price of an REO property taken over by lenders came in at $180,250 during Q3 2020. The median price of all homes sold during this same period stood at $281,438.

This discount on REO properties for buyers has been improving for the past year. As the median price of all homes sold nationwide has increased some 16.3% of this past year, the typical price of an REO property has increased only 12.7%. The price gap between “all properties” and REO properties is at its best level for buyers since Q3 2017.

It’s no surprise at all that the cheapest REO properties are located in areas that generally have the lowest priced homes overall. Those areas are in the Midwest and South…the median price for an REO home in all but one state in the Midwest and 50% of the Southern sates came in at less than $150,000 during Q3 2020. The median price for an REO home in 50% of Northeastern states and 100% of the Western states came in at +$200,000.

Take a look at key REO markets during Q3 2020, according to ATTOM Data Solutions: 

  • West Virginia offered buyers/investors the biggest discount of 73% off typical $182,750 price of all homes at $49,000 price of bank-owned home
  • Michigan offered buyers/investors 57% discount on REO home at median $82,450 price compared to median $192,500 price of all homes
  • Typical REO median price in Nevada came in at $278,00 or 12% discount off median price of $315,00 for all homes
  • Hawaii, the state with most expensive housing in the country, offered buyers/investors a discount of 15% or $492,000 off the $577,500 median price for all homes.

 

Thanks to ATTOM Data Solutions.

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Also read: Home Prices in Hamptons Hit Record Highs, 2019 Profile of Home Buyers & Sellers, Where iBuyers Sold the Most in Q3 2019

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