Worries amid foreclosure wave
Survey: Declining interest in buying foreclosed homes
By Inman News, Wednesday, December 17, 2008.A rising number of U.S. adults are worried about the potential negative aspects to purchasing a foreclosed home, according to survey results released Tuesday by online real estate company Trulia and foreclosure data provider RealtyTrac.
Both companies also compiled a series of statistics on foreclosure properties to accompany the survey results.
About 47 percent of the online survey's 2,033 respondents said they would consider purchasing a foreclosed home -- down from 54 percent in an April survey. The latest survey was conducted by Harris Interactive from Nov. 11-13 among U.S. adults 18 and up.
The survey found that 80 percent of respondents believe there are negative aspects to purchasing a foreclosed home, a rise from 69 percent in the April survey.
"What's significant about our findings is that just as the market is being flooded with more foreclosures, homebuyers are more hesitant to buy them," said Pete Flint, Trulia CEO and co-founder, in a statement.
And Rick Sharga, senior vice president for RealtyTrac, stated, "The results of this study are eye-opening and highlight the need for consumer education about foreclosures. Being that the sale of foreclosed properties has been on the rise due to the increased inventory and discounts available on foreclosed homes, it is somewhat counterintuitive -- although not totally unexpected -- that consumers are more hesitant to purchase a foreclosed property."
The survey also revealed that 56 percent of single/never-married respondents were "at least somewhat likely" to consider buying a foreclosed home, down from 60 percent in April; 43 percent of married adults were at least somewhat likely to consider buying a foreclosed home, down from 50 percent in April; and 42 percent of divorced, separated and widowed adults were at least somewhat likely to consider buying a foreclosed home, also down from 50 percent in April.
Trulia and RealtyTrac also released data on Tuesday that list Pennsylvania as the state with the greatest discounts on foreclosed, bank-owned properties (REOs) compared to the median list price for standard properties. The companies report that the median REO price in that state is $25,000, compared with a typical median list price of $189,900. The data is from Dec. 8-12.
Vermont had the second-highest "foreclosure discount," the companies reported, followed by New York, South Carolina, Alabama, West Virginia, Ohio, Kentucky, Tennessee and Delaware.
And among city areas, Henderson, Nev., had the highest foreclosure discount compared to the overall median list price, at 33 percent. Next on the list was Las Vegas, Nev. (24 percent); Tracy, Calif. (23 percent); Elk Grove, Calif., and Port Saint Lucie, Fla. (18 percent); Hesperia, Calif. (17 percent); Kissimmee, Fla. (16 percent); Gilbert, Ariz. (15 percent); and Clermont, Fla., Hollywood, Fla., and Palm Bay, Fla. (14 percent).
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Submitted by sharon tompkins on December 17, 2008 - 9:23am.
The article didn't say what the negaqtive aspects of buying a foreclosed home are - any info from the survey on why buyers are turning negative? I imagine going thru the long purchase process with the bank is one negative.
Submitted by Scott Nelson on December 17, 2008 - 2:06pm.
Perhaps if the banks were more pro-active & helpful in the marketing & sale of the bank owned property buyers wouldn't be quite so hesitant. They want it 100% their way and these are the resultant attitudes they recieve back. It may be just one of hundreds in their inventory but to the buyer it's very important & a very uncertain process.
As a Realtor I'm amazed at some of the processes & hurdles put in place by some banks. If the banks were regular sellers I wouldn't tolerate them as a client with some of their demands. Banks have to actually compete with other banks listings to move their inventory.
Just my $.02
Happy Holidays to All
Submitted by Joseph Reiner on December 17, 2008 - 2:26pm.
This article needed more development. As noted, no hint as to why borrowers are more hesitant. And no general data to compare to--borrowers are probably more hesitant to buy any kind of property than they were last year.
Similarly, lack of insight offered as to why the REO discount is so steep in some places compared to others.