The stigma against buying a foreclosed property eroded in recent
years with buyer interest in foreclosure acquisitions tripling over the
past two and a half years, Realtor.com said Wednesday.
Ninety-two percent of potential foreclosure buyers surveyed by
Realtor.com plan to live in the foreclosure they purchase rather than
leverage it as an investment tool.
About 1.5 million foreclosures were backlogged leading up to the
signing of the mortgage servicer settlement, creating a situation where
there is now a significant supply of inventory for homebuyers to choose
from among distressed real estate.
Homebuyer interest in foreclosures from October 2009 to today grew by
159%. In the current market, more than 64% of homebuyers say they are
likely to acquire a foreclosure, up from only 25.3% two and a half years
About 6.9% of today's homebuyers are interested in acquiring a foreclosure as an investment, the report said.
"We see a combination of factors coming into play explaining the
unexpected interest in foreclosures," said Steve Berkowitz, chief
executive officer of Move Inc., which operates Realtor.com.
"Reductions in supply, expectations that home prices will rise, and
changing attitudes toward foreclosures are contributing to the increased
demand, especially among owner-occupants," he said.
At the same time, Realtor.com discovered that 55.7% of surveyed
Americans believe a backlog of 1.5 million foreclosured properties will
be released in the next year, lowering home values. Those most concerned
are homeowners in the Midwest with 62.2% saying they are concerned with
an onslaught of foreclosure sales lowering prices. Most of the
backlogged foreclosures are expected to be released in the nation's more
than 20 judicial foreclosure states as properties make their way
through the court-directed foreclosure process. Most of those states are
in the Midwest and Northeast.
Subscribe to this post's comments using