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FNC releases statistics on market distress

OXFORD — Mortgage technology company FNC Inc. has released statistics that pinpoint 2008 and 2009 as the years that saw the worst market distress, with more than 25 percent of foreclosed properties liquidated at more than a 40 percent discount.

Other facts from the study show that in 2010, while the bottom quartile continued to experience large price discounts, there were signs of modest improvement in the remaining three-fourths of the foreclosure sales.

Ohio tops the nation in market distress — three of its major metropolitan cities are ranked among the most distressed markets, averaging more than 42 percent price discounts in foreclosure sales. Among the top 30 metropolitan statistical areas (MSAs) that make up the FNC 30-MSA Composite Residential Price Index, six key California markets incurred the smallest foreclosure discounts in 2010.

“Existing measures of foreclosure discount simply report the ratio of average liquidating price of foreclosed properties to average sales price of non-distressed sales,” says Yanling Mayer, senior research economist at FNC. “While useful as a general indicator of market distress, the foreclosure discount computed as such cannot be used reliably to measure the impact of market distress on the final liquidating price of foreclosed homes. Foreclosure and non-foreclosure sales samples are generally not comparable because of the differences in size, non-size physical attributes and conditions, neighborhoods, etc.”

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