Survey Reveals Fewer Buyers Attracted to Foreclosed Homes
Monday, December 22, 2008
At a time when foreclosures continue to mount, there's less of an appetite to buy these distressed homes, according a survey released Tuesday.
A November survey, conducted for real estate tracking firms Trulia.com and RealtyTrac, showed that 47 percent of U.S. adults would consider buying a home in foreclosure. However, seven months ago, 54 percent said they'd like to buy a foreclosed property.
The decline is attributed to prospective buyers gradually understanding the negative aspects of dealing in foreclosures or so-called short sales, in which lenders take less than what's owed on the mortgages and forgive the remaining debt. Some buyers cite hidden costs, a difficulty in getting banks' attention and the poor condition of many of the homes.
Still, many buyers have little choice but to look at foreclosures or short sales. It is estimated that roughly one in three homes on the Multiple Listing Service in Broward and Palm Beach counties are distressed properties.
South Florida has been one of the hardest-hit regions nationwide when it comes to foreclosures. During the housing boom of 2000 to 2005, people stretched to buy homes with adjustable-rate mortgages that later reset to much higher interest rates.
Although lenders are modifying loans and issuing foreclosure moratoriums during the holidays, analysts say a second wave of foreclosures will happen next year as more people lose their jobs and more adjustable-rate loans reset.
A November survey, conducted for real estate tracking firms Trulia.com and RealtyTrac, showed that 47 percent of U.S. adults would consider buying a home in foreclosure. However, seven months ago, 54 percent said they'd like to buy a foreclosed property.
The decline is attributed to prospective buyers gradually understanding the negative aspects of dealing in foreclosures or so-called short sales, in which lenders take less than what's owed on the mortgages and forgive the remaining debt. Some buyers cite hidden costs, a difficulty in getting banks' attention and the poor condition of many of the homes.
Still, many buyers have little choice but to look at foreclosures or short sales. It is estimated that roughly one in three homes on the Multiple Listing Service in Broward and Palm Beach counties are distressed properties.
South Florida has been one of the hardest-hit regions nationwide when it comes to foreclosures. During the housing boom of 2000 to 2005, people stretched to buy homes with adjustable-rate mortgages that later reset to much higher interest rates.
Although lenders are modifying loans and issuing foreclosure moratoriums during the holidays, analysts say a second wave of foreclosures will happen next year as more people lose their jobs and more adjustable-rate loans reset.
