A new study shows that Americans have significant interest in purchasing foreclosed homes at a discount, a sign that the housing market might recover even more quickly. The recent study, conducted by Trulia and RealtyTrac, found that 56% of current U.S. renters as well as 47% of U.S. homeowners were at least "somewhat likely" to purchase a foreclosed home. This comes along with expectations from respondents that a home in foreclosure would cost an average of 38% less than a normal home in today's market, which is the average discount predicted by RealtyTrac and used in this survey. The current average discount on sales of bank-owned REO homes is slightly lower, at 36%.
According to Ken Shuman, spokesperson for Trulia, it is now more affordable to purchase a foreclosed property than to rent in 78 major U.S. cities, a significant piece of information for those struggling with the decision to rent or buy in today's tumultuous market. Shuman also argues that with such rates, now is the time to buy, citing concerns over rising inflation and increasing interest rates as the reasons many prospective homeowners are choosing to buy property now.
Trulia and RealtyTrac have conducted such surveys since the market crashed in 2008 in an attempt to gauge Americans' perspective on and attitude towards purchasing homes that had been foreclosed and the overall housing market recovery. These most recent results show a positive trend in attitude, which is possibly due to the fact that bank-owned homes in recent years have become a common sight.
There are concerns about the process, however. Hidden costs, the possible risky buying process, and still-declining home value were all concerns that renters and homeowners shared, yet a large portion of the population said they could overlook these in order to save over a third on a home's cost.
The Trulia/RealtyTrac survey also asked for opinions on the housing market in general and on the federal government's attempts to improve the housing situation in particular. Respondents were asked if they thought the federal government was doing enough to help homeowners struggling with their mortgage payments. Forty-five percent believe the government is not doing enough, while 17 percent said it was doing too much, 16% said they were doing the right amount and 22% were undecided.
The study also reflected that almost a third of respondents - 30% of those surveyed - said they had personally experienced difficulty with their home payments or knew someone who had. These troubles included struggling with mortgage payments, applying for a loan modification, stopping payments, attempting or completing a short sale, getting foreclosed on or walking away altogether.
Such events could definitely have an impact on respondents' attitude towards measures being made by the federal government. Consequently, over half of those surveyed believed a full housing market recovery would not take place until 2014 or later. Just six months ago, 42% of American adults said in a previous survey that they thought the market would turn around by 2012. This number is now down to 23%, as many major U.S. cities have seen double digit home price drops.
The most recent survey shows that many Americans underestimated the amount of time a market recovery would take, says Trulia CEO Pete Flint, adding that he believes the market will see price stability within the next 18 months.
If you are considering purchasing a home, contact our office today for a free consultation. Here at P&P Law, we can guarantee that we represent your unique needs and help you through the purchase process from start to end.If you are considering purchasing a home, contact our office today to schedule a free consultation. The turbulent housing market of the past few years has made significant changes to the market, including an increased amount of foreclosed properties available at a discount, and we have the tools and experience to help. Here at P&P, we can guide you through the purchase process from start to finish while catering to your unique real estate needs. Remember, you don't have to go it alone, especially in the current housing market.
