A new survey of prospective or current homeowners shows that overall interest in purchasing foreclosed homes has decreased over the last six months.
While younger adults and renters are increasingly more likely to purchase foreclosed properties, compared to those who already own a home, according to a new analysis by two online real estate sites.
The new survey commissioned by Trulia and RealtyTrac, and conducted November 5-9 by Harris Interactive, showed a decrease in consumers’ willingness to buy foreclosed properties, with 43 percent indicating that they are at least somewhat likely to consider purchasing a foreclosed home in the future. That compares to 55 percent surveyed online by Harris May 1-5.
But the analysis, involving responses from 2,203 current or future homeowners, shows hopeful signs within certain segments of the population that are in the market to buy or trade up.
The survey found that 24 percent of homeowners are at least somewhat likely to “trade up” to a larger home, and of these, 88 percent are at least somewhat likely to consider a foreclosed property, the survey said.
“Until unemployment levels off and starts to get better, we expect foreclosures to continue to play a big role in the 2010 housing market,” said Trulia co-founder and CEO Pete Flint.
Renters are showing a stronger interest in buying foreclosed properties, with 57 percent at least somewhat likely to purchase a distressed home in the future, possibly swayed by recently extended first-time homebuyer tax credits.
And younger renters are more likely to buy a foreclosed home: 61 percent of renters ages 18-34, and 65 percent of renters ages 35-44 are at least somewhat likely to consider purchasing a foreclosure, compared to only 40 percent of renters 55 years and older.
Among those showing an interest in foreclosures, there is also a willingness to spend money in renovations.
According to the survey, 95 percent of U.S. adults are willing to invest money in renovations when purchasing a foreclosed property. Additionally, more than half (55 percent) of respondents are willing to spend 20 percent or more of the purchase price to make improvements on a distressed property.
The November survey found slightly lower negative sentiment toward purchasing foreclosed properties: 81 percent of U.S. adults, compared to 85 percent in May 2009.
