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May 30, 2012 /PRNewswire/ -- Interest in buying foreclosures has almost tripled among potential home buyers in the past two and half years, and 92.1 percent of those buyers plan to live in them rather than use them as investments, according to a new national survey released today by Realtor.com. This suggests the stigma once associated with buying a foreclosure as a home has faded, and significant demand among potential owner occupants has developed for the more than 1.5 million foreclosures that accumulated leading up to the recently signed 49 state Attorneys General Agreement. Realtor.com is the #1 homes for sale site operated by Move, Inc. (NASDAQ: MOVE), the leader in online real estate.
According to the Realtor.com survey, homebuyer interest in foreclosures jumped 159 percent since
October 2009 when foreclosures accounted for 29 percent[i] of all home sales. In fact, more than two-thirds (64.9%) of today's homebuyers said they're likely to buy a foreclosure compared to 25.3 percent two and a half years ago. Only 6.9 percent of today's potential home buyers are interested in buying a foreclosure as an investment, down from 13.2 percent in
'We see a combination of factors coming into play explaining the unexpected interest in foreclosures," said
Steve Berkowitz, chief executive officer of Realtor.com operator Move, Inc. "Reductions in supply, expectations that home prices will rise, and changing attitudes towards foreclosures are contributing to the increased demand, especially among owner-occupants. As lenders begin processing their distressed inventories and releasing them for sale at the local level, we look to them to move carefully and monitor conditions so recently gained home values aren't diminished."
CONCERN POST-SETTLEMENT FORECLOSURE WAVE WILL LOWER HOME VALUESThe Realtor.com survey found that more than half of all Americans (55.7%) are concerned the more than 1.5 million backlogged foreclosures expected to be released by major lenders will lower home values in their markets. Midwesterners (62.2%) are more concerned than those in other regions while people in the Northeast are least concerned (42.8%). The majority of backlogged foreclosures are expected to be released in the 26 judicial states that require court orders before distressed properties can be processed and released for sale. Many judicial states are located in the Midwest and Northeast. Homeowners (56.1%) and non-homeowners (54.5%) are equally concerned.
FEAR OF FACING FORECLOSURE DECLINES, NO IMPROVEMENT SEEN IN FORECLOSURE PICTUREAs the stigma associated with buying a foreclosure has declined in the past few years, so has the fear of losing a home to foreclosure. Today, approximately one third of Americans (34.9%) fear they or someone they know will face foreclosure in the next year, down -33.5 percent from
March 2009 levels when 52.5 percent expressed this concern. Fear of facing foreclosure today is greatest among those earning less than
$30,000 a year and slightly higher among non-homeowners (38.6%) than homeowners (33.6%).
While foreclosure activities have declined 34 percent[ii] in the past year, most Americans say they haven't seen improvement in the foreclosure situation where they live. The Realtor.com survey found most Americans (49%) think the foreclosure situation is about the same as it was last year, while close to one in six (17.6%) say the foreclosure situation is worse. Only 21.3 percent think the foreclosure situation in their market is better. Foreclosures have in fact declined by 34 percent in the past 12 months.