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Press Releases
59 PERCENT OF HOMEOWNERS WITH A MORTGAGE WOULD NOT CONSIDER WALKING AWAY FROM THEIR HOME NO MATTER HOW MUCH THEIR HOME IS “UNDERWATER” ACCORDING TO A NEW SURVEY FROM TRULIA AND REALTYTRACOnly 1 Percent of Homeowners With A Mortgage Say Walking Away Is Their First Choice If Unable To Pay; 69 Percent Say Modifying Their Loan is Their First ChoiceWhile the stigma around owning a foreclosure has subsided, interest in purchasing a foreclosure is significantly down year-over-year
SAN FRANCISCO, May 20, 2010 – Trulia.com, smart real estate search to help you make better decisions, and RealtyTrac, the leading online marketplace for foreclosure properties, today released the latest results of an ongoing survey tracking home buyers’ attitudes towards foreclosures. The new online survey conducted on their behalf from May 10-12, 2010 by Harris Interactive® showed a notable decrease in consumers’ willingness to buy foreclosed properties compared to one year ago. Currently, 45 percent of U.S. adults age 18 and above are at least somewhat likely to consider purchasing a foreclosed home in the future, compared to the 55 percent of U.S. adults age 18 and above surveyed online by Harris Interactive® between May 1-5, 2009. Underwater and Walking Away Only 1 percent of homeowners with a mortgage say walking away from their home would be their first choice if they were unable to pay their mortgage. If their mortgage were to go “underwater,” 41 percent would at least consider walking away, while 59 percent would not consider walking away no matter how much their mortgage was underwater. “For every borrower who avoided foreclosure through HAMP last year, another 10 families lost their homes. It now seems clear that government programs will not reach the overwhelming majority of homeowners in trouble,” said Trulia’s co-founder and CEO Pete Flint. “Combined with decreased consumer interest around purchasing a foreclosure it may take even longer than anticipated to see true health return to the real estate market.” The Bank-Owned Discount 18 percent of U.S. adults expect bank-owned homes to offer a realistic price discount of less than 25 percent off the value of a similar home that was not in foreclosure. However, not all consumers have realistic expectations, with 36 percent saying that they expect to receive a discount of 50 percent or more when purchasing a bank-owned property. Most consumers (95 percent) would expect to pay less for a foreclosed home than for a similar home for sale that is not in foreclosure.
Negative Stigma to Buying a Foreclosure The current survey found lower levels of negative sentiment towards purchasing foreclosed properties than one year ago, with 78 percent of U.S. adults believing there are downsides to buying foreclosed properties compared to 85 percent in May 2009. Among those who think there are negative aspects to purchasing a foreclosed home, the top concerns about purchasing a foreclosed property between May 2010 and May 2009 include:
“It appears that potential homebuyers are taking a more realistic view of foreclosure purchasing,” Sharga continued. “Buying a foreclosure property still provides an opportunity for dramatic savings on a home, but the time and effort involved in executing a short sale, bidding against other buyers for an REO, or the need to do renovations may be issues for buyers not as focused on getting the best price.” Renovations and Remodeling The majority of U.S. adults (92 percent) said they would be willing to invest in improvements such as renovations and remodeling if they purchased a foreclosed home. Of those consumers who would be willing to invest in improvements, 65 percent would be willing to invest 20 percent or less of the purchase price to upgrade the property and make it their own. Renters Renters are showing strong interest in buying foreclosed properties, with 57 percent at least somewhat likely to purchase a foreclosed home in the future. In comparison, only 40 percent of current homeowners would consider buying a foreclosure in the future. Additionally, the likelihood to consider purchasing a foreclosure decreases with age: 65 percent of renters ages 18-34, 63 percent of renters between the ages of 35-44, and 54 percent of renters ages 45-54 are at least somewhat likely to consider purchasing a foreclosure, compared to only 31 percent of renters 55 years and older. Uses for Foreclosure Purchase Among U.S. adults at least somewhat likely to purchase a foreclosed home, 62 percent said they would use the property for their personal primary residence, 19 percent said they would use it as a rental investment, 8 percent said they would use it as a second home or vacation home, and 6 percent said they would buy and quickly resell (or flip). Renters were more likely to say they would purchase a foreclosed property as a primary personal residence (83 percent), while more than half of homeowners (51 percent) said they would purchase a foreclosed property for a use other than a personal primary residence. To listen to a replay of Pete Flint and For an infographic illustrating the results of this survey in a visual format, download infographic here. For more information about Trulia or to experience the power of a Trulia search, please visit http://www.trulia.com/. About Trulia, Inc. About RealtyTrac Inc. Media Contacts: |
