The price difference between pre foreclosure homes and non-foreclosed houses in Orlando, Florida, narrowed last year. Housing analysts are expecting the gap to get even smaller this year as foreclosure numbers increase and regular home sellers try to adjust to the flood of lower priced dwellings.

Foreclosed homes in Orlando were sold for a discount of 24% in 2010 when compared with regular residential properties. The percentage was down from the 30% difference recorded a year before. The average selling rate for foreclosed properties sold in the metro area last year was $111,938, falling from the 2009 average selling price of $122,688.

Meanwhile, foreclosed homes in Florida that were sold in 2010 had a 28% price difference compared with non-foreclosed dwellings. The gap was also down from the 32% recorded in 2009. At the national level, the price difference between regular homes and foreclosed houses increased. Analysts are predicting that in Orlando and the whole state of Florida, the price gap will continue to narrow in 2011 as more distressed properties enter the market and regular home sellers adjust their selling rates to compete with the much cheaper distressed dwellings.

A total of 20,418 foreclosed and pre foreclosure homes were sold last year in the Orlando metro area. For January 2011, 1,826 distressed properties were sold in Orlando, increasing by 5% when compared with January 2010. The median price for the month declined to $119,700 from the January 2010 median rate of $123,500. Statewide, median selling prices of houses dropped by 7% compared with year-ago levels, with total housing unit sales climbing by 14%.

According to the Orlando Regional Realtor Association, around 75% of existing residential property sales are accounted for by properties from foreclosure list, short sales and other homes that are under some stage of foreclosure. Meanwhile, another report showed that only about 50% of total closings were accounted for by distressed dwellings, but this figure does not include short sales and mortgages in default.

For the rest of 2011, pre foreclosure homes and foreclosed properties are expected to increase further. Analysts stated that once the percentage of distressed properties against total number of housing units reaches 50%, the price gap between the two types of residential properties will narrow further.

Original Post: Gap Between Pre Foreclosure Homes and Non-Foreclosures Narrowing on ForeclosureDeals.com.