Foreclosure home prices fall on LI

Sale prices on foreclosures and homes with delinquent borrowers were on average slashed more on Long Island than the rest of the state and nation, RealtyTrac said in a new report made public Wednesday.

The figures, which covered this year's first quarter, put the average price of such sales in Nassau at $318,805, or 34.5 percent off the average price of regular homes sales, while Suffolk's $250,745 average price reflected a 41 percent discount from regular home sales.

Nationwide and across the state, the average discount hovered around 27 percent, said the firm, an online market for foreclosures.

The data come from RealtyTrac's first-ever quarterly report on sale prices of homes with distressed borrowers. Sales of foreclosures and homes of delinquent borrowers represented 13 percent of all closings in Nassau and 16 percent in Suffolk, data show.

Real estate agent Thomas McGiveron, who specializes in foreclosures and sales of distressed properties, said Long Island's bigger discount probably reflects a "hangover" effect. The real estate crisis hit most other states first and their deep discounts are now leveling off, he said, but there was a delay here, where the foreclosure process can take two years. "It's hitting hard now and it's going to hit hard in 2010 and 2011," said the agent from Coldwell Banker Matherson in West Islip.

Lower prices for foreclosure homes affect property values and sales prices of homes in general. Shoreham-based appraiser Stephen Sikorski said there's an interconnected market. "It's an economic fact of life that competition is what it is," he said. "If the house down the block, a foreclosure, is selling for 150 [thousand dollars], you're not going to sell yours for 250 [thousand dollars]. You're going to sell yours for 200 [thousand dollars]."

Some local real estate agents said the drop in the number of troubled homes sold parallels the overall drop in home sales in general. For example, the report said first-quarter sales of troubled homes in Suffolk fell 8 percent from the end of last year. When it comes to all types of home sales in Suffolk, the first quarter had a 39 percent drop compared to the end of last year, said Miller Samuel, a Manhattan-based appraiser.

McGiveron said sales have dropped for one big reason: "The inventory is down."

He's seen it fall by 25 percent this year over the same time last year for properties his company handles islandwide, even as lenders repossess homes at high rates. Lenders are not releasing their properties onto the market for various reasons and there are delays in listings because new laws have given homeowners and renters pre-eviction rights, said McGiveron, who works at Coldwell Banker Matherson.

At the same time, he said, short sales, in which the lenders agree to take less than owed on the mortgage, have been taking longer than usual, partly because lenders were waiting for the recently launched federal incentives to make these deals.