New Survey Results from Trulia and Realty Trac

Fewer homebuyers are likely to consider purchasing a foreclosed property in the future, according to a survey conducted by the online real estate companies Trulia.com and RealtyTrac.  Conducted in early November, the survey reported 43% of US adults indicate they are at least somewhat likely to consider purchasing a foreclosed home, a drop from 55% in the same survey conducted in May.

According to the survey, 23% of adults are at least somewhat likely to purchase a second home or an investment property. Of those, 92% are interested in the foreclosure market. Those looking to “trade up” make up 24% of homeowners and of those 88% are looking at foreclosures.

Renters show the strongest interest in buying foreclosed properties as 57% are somewhat likely to make a purchase in the future. Of younger renters, aged 18-34, 61% are interested in foreclosures, and 65% of renters between the ages of 35-44 showed interest as well.

The survey showed that consumers expect a good return on their investment in foreclosed homes. Almost two-thirds, 65%, of adults expect a discount of 30% or more when buying a foreclosure. In the Northeast, 43% of respondents expect a 50% discount or higher.

But as 95% of adults are willing to invest money in a foreclosed property, many cited hidden costs as the worst aspect of buying one. Of those surveyed, 81% saw a negative stigma with foreclosure purchases, a jump from 69% when the survey was conducted in May.

Executives at Trulia and RealtyTrac differ in their projections for the future.  Pete Flint, Trulia.com’s CEO and co-founder, said in a conference call Tuesday that housing prices will continue to fall another 5-to-10% as sales volumes flatten out. In 2010, he anticipates a double-dip in the economy and another downturn in 2010 as government incentives disappear, the shadow inventory of foreclosures hits the market and interest rates start to reach 6%.

Rick Sharga, senior vice president of RealtyTrac, said that a broader recovery is in store as the shadow inventory will be a very “gradual, measured” trickle into the market. He expects that the amount of homes receiving a foreclosure notice will reach 3.2m and possibly 4m in 2010.

(resource:  NewsGeni.us)