Cheap foreclosed properties are still on top of the lists of investors despite the slight decline in the number of adult Americans with plans of buying a foreclosure home someday, based on the results of a survey conducted by Harris Interactive for two major real estate companies.
Based on survey results, 23 percent of respondents have plans of buying an investment property or a second home and 92 percent of these respondents said they are likely to acquire a foreclosure property.
The survey also showed that 95 percent of responders are likely to spend for renovations after buying foreclosure properties and that 55 percent are willing to set aside at least 20 percent of the home price for improvements on distressed properties. In an earlier study by another research firm, the average buyer of a newly-built home spends about $30,000 for additional things like furniture and hot water heaters.
According to real estate executives, even during very dark economic downturns, people do not stop dreaming about positive reversals in their economic lives, and cheap foreclosed properties are the ones giving them hopes of succeeding in their investment plans.
Based on the survey results, two-thirds of respondents expect a price discount of at least 30 percent when buying foreclosure homes. Prospective buyers in the Northeastern part of the U.S. expect the biggest price reductions, with 43 percent of them expecting foreclosure homes to be sold off at a discount of at least 50 percent.
Aside from investors, most renters have plans of buying foreclosure homes in the future, with 57 percent of renting respondents saying they will likely purchase a foreclosed house in the future. As expected by most observers, younger renters are also showing stronger interest in acquiring foreclosed homes compared to older renters.
The survey showed that 61 percent of young renters in the 18-34 age group and nearly two-thirds of renters aged 35 to 44 have considered buying a foreclosure property. Among respondents aged 55 and above, only 40 percent have considered buying a foreclosure house in the future.
Survey results also showed that the expansion and extension of the federal tax credit will help increase the number of prospective buyers finally making their home purchases. Of the 24 percent of respondents planning to take advantage of the move-up tax credit, 88 percent are likely to consider buying cheap foreclosed properties.
