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Without Tax Credit, Housing Market Isn't 'Pretty'

A foreclosed home in Miami earlier this year.
Joe Raedle
Getty Images
A foreclosed home in Miami earlier this year.

There's word from housing analysts RealtyTrac this morning that "foreclosure homes accounted for 25 percent of all U.S. residential sales in the third quarter of 2010 and that the average sales price of properties that sold while in some stage of foreclosure was more than 32 percent below the average sales price of properties not in the foreclosure process."

According to RealtyTrac, in the second quarter foreclosed homes sold at a 26% discount to other houses and a year ago, in third-quarter 2009, the discount was 29%.

American Public Media's Marketplace Morning Report says last quarter's discount was "the biggest price difference since 2005. And it could increase this winter quarter."

Bottomline: "The foreclosure buying spree of 2009 has slowed," Marketplace's Gregory Warner reports. "In part it's because all home sales slowed after a popular home buyer tax credit expired in June."

And RealtyTrac's Daren Blomquist tells Marketplacethat "we got a stark view of what the market is like without the help of that tax credit in the third quarter and it wasn't -- it wasn't very pretty."

Before we all get too gloomy, though, it's wise to remind ourselves that there have been some much more positive economic indicators this week.

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Mark Memmott is NPR's supervising senior editor for Standards & Practices. In that role, he's a resource for NPR's journalists – helping them raise the right questions as they do their work and uphold the organization's standards.