Foreclosure interest wanes as defaults continue to rise
In May, 55 percent of adults said they were at least somewhat likely to consider buying a foreclosed home. When a similar online survey was conducted last month by Harris Interactive, only 43 percent of respondents said they'd consider such a purchase.
CHICAGO - Consumers' fascination with foreclosures may be flagging.
In May, 55 percent of adults said they were at least somewhat likely to consider buying a foreclosed home. When a similar online survey was conducted last month by Harris Interactive, only 43 percent of respondents said they'd consider such a purchase.
The survey, released Tuesday by real estate Web companies Trulia.com and RealtyTrac, could portend more difficult times for the housing market, particularly because most economists expect foreclosures to peak nationally next year.
A lack of interest in purchasing bank-owned properties not only would mean that foreclosed individual homes sit vacant longer but also would affect the broader housing market by bringing down median housing prices in neighborhoods beset with foreclosures.
Rick Sharga, senior vice president of RealtyTrac, an online marketplace of foreclosure listings, said the decrease in buyer enthusiasm for foreclosures should be expected. "Some of the early enthusiasm of something new has waned," he said, but added, "People that are interested are very serious about this."
RealtyTrac predicts that by year's end, 3.2 million households nationally will have received a foreclosure notice in 2009. Next year, the number of filings, which include notices of default, sheriff's sale or bank repossession, could approach 4 million, Sharga said.
"Follow the unemployment numbers" to determine where foreclosures will rise next year, Sharga said. Last week, RealtyTrac said November foreclosure filings in the Chicago area rose 107 percent over a year ago. Illinois' unemployment rate stands at 11 percent.
Moody's Economy.com previously has predicted an additional 4.6 million foreclosures nationally in 2010.
"There are really two sides to this story, the positive and the bleak," said Pete Flint, chief executive of Trulia.com.
The positive side is that buyers have grown more realistic about their expectations of what a foreclosed property will cost to purchase and renovate, he said.
The Harris survey included 2,203 adults.
(c) 2009, Chicago Tribune.
Distributed by McClatchy-Tribune Information Services.