Housing Recovery: Faith or Just a Good Deal?
The good news is that more Americans say they are willing to consider buying a foreclosed property; the bad news is that they're expecting a bigger discount on that property than ever before.
A new survey from online real estate sites RealtyTrac and Trulia finds 49 percent of those surveyed said they would be "at least somewhat likely to consider purchasing" a foreclosure, up from 45 percent last May; however, 2/3 of those respondents are expecting at least a 30 percent discount to real market value, and 1/3 expect a 50 percent discount.
So much for house prices finding a bottom any time soon.
The reason behind the discount is clear: Risk.
A growing number of Americans think that the process of buying a foreclosure is more risky than ever. There's your impact of the big bank robo-signing scandals. And those scandals, which helped to diminish faith in the mortgage market overall, also pushed back the housing recovery, at least according to the survey:
When Americans Think The Housing Market Will Recover:
|YEAR||% OF AMERICAN ADULTS WHO BELIEVE HOUSING WILL RECOVER|
|2015 or later||22%|
Suffice it to say that faith is not abundant among today's potential home buyers, but that doesn't exactly mean they're immovable. Credit Suisse reported the first "uptick" in buyer traffic in November since last April:
"We heard varying reasons for the slight bounce in traffic, with some agents surprised and unsure of the real cause. One clear theme was the attractiveness of low mortgage rates and the fear of rising rates, which we think led some buyers to decide to act. In addition, many buyers emerged from their summer/fall sabbatical to see some of the bargains firsthand."