The sales of foreclosed properties are having a noticeable impact on home prices and increased sales in major real estate markets across the United States. In August, 23 of the 25 metropolitan statistical areas (MSAs) tracked by Radar Logic's Residential Property Index experienced year-over-year home price declines, while 12 of the metro areas saw sale transactions increase. Both the price declines and the transaction count increases are due, in part, to growth in heavily discounted foreclosure-related sales, according to the Radar Logic's market report.

Motivated transactions, which Radar Logic defines as sales at foreclosure auctions and sales of foreclosed property by financial institutions, increased in all 25 metro areas since 2007 and in 22 MSAs since July. In some markets, the increase in transaction counts also reflected a seasonal uptick in market activity.

Radar Logic's key findings:

 · In California, Arizona and Nevada, deep price discounts associated with foreclosures appear to have attracted buyers. Seven of nine markets that saw sales increase from a year ago were located in those states.

· The nine MSAs that saw sales pick up from a year ago were Sacramento (up 74.9 percent year-over-year), San Diego (52.9 percent), Los Angeles (47.4 percent), San Francisco (32.9 percent), Washington, DC (30 percent), Las Vegas (29.5 percent), Phoenix (22.9 percent), San Jose (16.3 percent) and Minneapolis (3.3 percent).

· Despite seeing a big increase in sales from a year ago, Los Angeles and Las Vegas saw transactions fall slightly from July to August.

· St. Louis saw the biggest decrease in transactions from July to August (down 15.7 percent) and year-over-year (down 43 percent), but remained the fourth-best performing market in year-over-year price appreciation (-4.2 percent).

· Five markets where sales hadn't bounced back to 2007 levels in August nevertheless saw sales pick up from the month before. Those markets were Boston (up 24.1 percent from July to August), Philadelphia (19 percent), Chicago (9.7 percent), Detroit (up 6.9 percent) and New York (0.2 percent).

Patience is a virtue
"While increases in motivated sales have put downward pressure on prices, it is important to bear in mind that prices have fallen substantially in transactions that are not related to foreclosures, said Radar Logic CEO Michael Feder in recent press release. Twenty MSAs have seen prices for transactions we do not classify as, ‘motivated' give back over 50 percent of the appreciation they experienced during the height of the housing boom. This indicates that home prices have made substantial progress toward equilibrium, though they may fall further before they reach it."

Feder also said: "The current initiative to reduce new foreclosures being led by the Federal Deposit Insurance Corporation (FDIC) could, if enacted, play an integral role in near term prices."

While it can be awfully frustrating right now if you're trying to sell your home and you're living in down markets like California, Florida or Las Vegas, but there's nothing much the average homeowner or Realtor can do to make this market speed up its recovery. It's a matter of waiting out a storm that was way overdue. Home sellers need to keep up with local market conditions and be realistic when pricing their property. The days of making 30 percent or more on your home is long gone. This doesn't mean it's impossible to sell your property under these strained conditions, it just means it's going to take a little more practical planning and, most of all, patience.

Interested in buying a foreclosed property? Homescape's Foreclosure Guide is packed with detailed advice that will guide you through the entire process. And learn more about your new community on our local Snapshot pages.

Got hot local housing tips or a story you want to share? Contact Amy Le at openingdoorsblog@homescape.com.