More buyers are looking to score a deal on a foreclosure, while more Americans are worried that the foreclosed properties will lower their home values.
Those are two of the highlights from a recent Realtor.com survey that illustrates how people's attitudes about foreclosures are changing. That's perhaps not too surprising, given that bank-owned properties have become commonplace in American cities in recent years.
Realtor.com, the website for the National Association of Realtors, commissioned the survey, which was conducted May 4-6. The results are based on more than 1,000 interviews.
Here are the findings:
- Interest in buying a foreclosure has nearly tripled in the last two-and-a-half years. About 65 percent of interested home buyers say they are likely to buy a foreclosure, up from about 25 percent in late 2009.
- Of those interested, 92 percent want to buy a foreclosure as their primary residence, as opposed to buying the properties as investments. In October 2009, more buyers -- 13 percent of those interested in foreclosures -- were investors and would-be investors.
Steve Berkowitz, chief executive officer of Realtor.com operator Move Inc., said in a statement: “Reductions in supply, expectations that home prices will rise, and changing attitudes towards foreclosures are contributing to the increased demand, especially among owner-occupants."
- About 56 percent of Americans are worried that the more than 1.5 million backlogged foreclosures will lower their home value. The concern weighs heaviest among Midwesterners, with 62 percent telling surveyors they were worried.
The majority of the so-called shadow inventory is in the 26 judicial states that require court orders before distressed properties can be released for sale. (Maryland is one of the states that require judicial approval, though its process doesn't involve full-blown court cases.)
- Some good news: Fewer people think they, their relatives or their friends are in danger of foreclosure. About 35 percent of Americans say they fear that they or someone they know will face foreclosure in the next year, down from about 53 percent in March 2009. As one might imagine, the fear of facing foreclosure is greatest among people who earn less than $30,000 a year.
- Foreclosure activity is down by 34 percent in the last year. Even so, about half of Americans don't think the situation has gotten any better. (Perhaps that's because the shadow inventory is weighing on them -- see above.)
- Most buyers looking to purchase a foreclosure expect to get between 10 percent and 30 percent off a house. The actual average discount is about 29 percent, Realtor.com says.