Homebuyer interest in purchasing a foreclosed property more than doubled in the past 2 1/2 years even as the U.S. available inventory shrinks, according to a Realtor.com survey.
The share of buyers who say they’re likely to purchase a foreclosed home jumped to almost 65 percent from 25 percent in October 2009, according to the telephone poll by Realtor.com, the National Association of Realtors’ website. The survey was conducted this month and the results were released today.
U.S. foreclosure filings fell to a five-year low last month as lenders sought to avoid repossessing properties and a housing recovery showed signs of taking hold, RealtyTrac Inc. reported on May 17. The number of default, auction and seizure notices sent to homeowners dropped 14 percent from a year earlier and was the lowest tally since July 2007.
“Because prices are getting towards the bottom, people see foreclosures as even a greater value because they’re usually priced below market,” Steve Berkowitz, chief executive officer of Campbell, California-based Move Inc., which operates the Realtor.com website, said in a telephone interview.
Home prices in 20 U.S. cities fell in the 12 months ended March at the slowest pace in more than a year. The S&P/Case-Shiller index of property values dropped 2.6 percent from a year earlier following a 3.5 percent decline in February, the group reported yesterday.
Almost 56 percent of respondents in the Realtor.com survey said they are concerned that major lenders will release backlogged foreclosures onto the market and bring down values in their markets.
A “gradually rising foreclosure tide” forecast by Irvine, California-based RealtyTrac after a February settlement by the nation’s biggest mortgage servicers over faulty documentation practices has yet to materialize. Banks have been finding alternatives to seizures, such as approving the sale of distressed properties for less than the amount owed on them.
The Realtor.com survey of 1,004 adults was conducted from May 4 to 6 and has a margin of error of 3 percentage points.