|
Bargain hunters lose interest
Whilst the downturn in the US property
market has provided brilliant opportunities for some investors to pick up a
bargain, the novelty is now wearing off and the thrill of snapping up a
foreclosed property has dwindled...
Long a bargain hunter's
dream come true, foreclosed properties (homes that are owned by the
lender because the home owner couldn't make their mortgage payments) provide a real opportunity to
pick up a lot of home for your money.
Earlier this year, a
whopping 54 per cent of people surveyed by Trulia.com, a property search engine and foreclosure tracker RealtyTrac, said that they would
definitely consider buying a foreclosed home.
Earlier this month, RealtyTrac said that November foreclosure filings -
default notices, auction sale notices and bank repossessions - were reported on
259,085 properties, a seven per cent decrease from the previous month, but a 28
per cent jump from this time last year.
The report also showed one in every 488 housing units received a filing in
November, with the highest rate seen in Nevada
which has enjoyed a strong housing boom in the last few years.
Now, thanks to concerns about hidden costs and falling home values, the
enthusiasm for picking up a foreclosed property is waning and the number of
people keen to buy has fallen from 54 per cent to 47 per cent.
Meanwhile, 80 per cent of people now express concern about the negative
aspects of buying a foreclosed home, up from 69 per cent earlier this year.
Pete Flint, Co-Founder and Chief Executive of Trulia.com said, "What's
significant about our findings is that just as the market is being flooded with
more foreclosures, homebuyers are more hesitant to buy them."
Hassle factor
A big
part of the current American property is made up of foreclosures and short sales
(the latter are pre-foreclosure properties where the home
owners owe the bank more than the value of their home).
Whilst foreclosed homes could sell for a fraction of their worth in this
market and may seem like a steal, if you are not careful, these kinds of homes
could also harbour unpleasant surprises which prove very costly.
Estate agents estimate that about half of all foreclosed properties to be
sold by mortgage companies nationwide have substantial damages, sometimes
inflicted by previous owners who are upset at losing their homes.
As a result, prospective buyers are asking for large discounts to offset the
perceived risks. More than 75 per cent of consumers think they should pay at
least 25 per cent less for a foreclosed home, with three in 10 expecting to pay
at least half that of a comparable home which is not in foreclosure.
Mr Flint of Trulia.com also said that the survey showed that there are a lot
of myths about buying a foreclosed property.
"Misinformation around foreclosures abounds, and that's dangerous for the
market and for home buyers.
"Overall foreclosure activity is expected to increase in 2009 and bottom
out next year in hardest hit areas.
"House prices will continue to decline on a national and regional level
until foreclosures stabilize," added Mr Flint.
Rick Sharga, Senior Vice-President of RealtyTrac, said, "The delay tactics
put in place by the Government have not had an effect beyond delaying the
foreclosures.
"We will see a significant spike in early 2009."
Picture by everystock
|
Related Articles |
 |
 |
Record breaking house prices
2008 was a record breaker in terms of UK house prices - they fell by 15.9 per cent over the year, which is the biggest annual drop on record, according to a new survey by Nationwide...
More...
|
|
|
|