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One in four homes sold in 2010 were foreclosed

RealtyTrac says 26 percent of homes sold last month were distressed properties.

RealtyTrac says 26 percent of homes sold last month were distressed properties.

The year-end foreclosure report is out and by the looks of it, purchases of distressed housing took up a significant chunk of the real estate market.

RealtyTrac, which tracks foreclosed housing in more than 2,200 counties countrywide, says that distressed properties took up more than one in four - 26 percent - of all U.S. residential sales during the year.

According to the report, approximately 831,574 foreclosed homes were sold to third parties, which is down 31 percent from 2009.

James Saccacio, CEO of RealtyTrac, says the number of people moving into foreclosed homes was influenced by a combination of factors.

"Foreclosure sales in the fourth quarter faced the twin headwinds of the expired homebuyer tax credit ... and the foreclosure documentation controversy, which hit in the fourth quarter and temporarily froze sales of foreclosures from several major lenders," Saccacio said.

Something else that likely affected foreclosure sales was their cost relative to homes not in foreclosure. The report indicates foreclosed homes averaged 28 percent below the sales price of homes not in foreclosure.

This may have influenced the conclusions reached by the National Association of Homebuilders earlier this month, as it found home prices have never been more affordable.