Foreclosure Home Press Releases 59 Percent Of Homeowners With A Mortgage Would Not Consider Walking Away From Their Home No Matter How Much Their Home Is “Underwater” According To A New Survey From Trulia And Realtytrac

59 Percent Of Homeowners With A Mortgage Would Not Consider Walking Away From Their Home No Matter How Much Their Home Is “Underwater” According To A New Survey From Trulia And Realtytrac

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Only 1 Percent of Homeowners With A Mortgage Say Walking Away Is Their First Choice If Unable To Pay; 69 Percent Say Modifying Their Loan is Their First Choice

While the stigma around owning a foreclosure has subsided, interest in purchasing a foreclosure is significantly down year-over-year

SAN FRANCISCO, May 20, 2010Trulia.com, smart real estate search to help you make better decisions, and RealtyTrac, the leading online marketplace for foreclosure properties, today released the latest results of an ongoing survey tracking home buyers’ attitudes towards foreclosures. The new online survey conducted on their behalf from May 10-12, 2010 by Harris Interactive® showed a notable decrease in consumers’ willingness to buy foreclosed properties compared to one year ago.  Currently, 45 percent of U.S. adults age 18 and above are at least somewhat likely to consider purchasing a foreclosed home in the future, compared to the 55 percent of U.S. adults age 18 and above surveyed online by Harris Interactive® between May 1-5, 2009.

Underwater and Walking Away
Only 1 percent of homeowners with a mortgage say walking away from their home would be their first choice if they were unable to pay their mortgage.  If their mortgage were to go “underwater,” 41 percent would at least consider walking away, while 59 percent would not consider walking away no matter how much their mortgage was underwater.

“For every borrower who avoided foreclosure through HAMP last year, another 10 families lost their homes. It now seems clear that government programs will not reach the overwhelming majority of homeowners in trouble,” said Trulia’s co-founder and CEO Pete Flint.  “Combined with decreased consumer interest around purchasing a foreclosure it may take even longer than anticipated to see true health return to the real estate market.”

The Bank-Owned Discount
18 percent of U.S. adults expect bank-owned homes to offer a realistic price discount of less than 25 percent off the value of a similar home that was not in foreclosure. However, not all consumers have realistic expectations, with 36 percent saying that they expect to receive a discount of 50 percent or more when purchasing a bank-owned property.  Most consumers (95 percent) would expect to pay less for a foreclosed home than for a similar home for sale that is not in foreclosure.

Negative Stigma to Buying a Foreclosure
The current survey found lower levels of negative sentiment towards purchasing foreclosed properties than one year ago, with 78 percent of U.S. adults believing there are downsides to buying foreclosed properties compared to 85 percent in May 2009. Among those who think there are negative aspects to purchasing a foreclosed home, the top concerns about purchasing a foreclosed property between May 2010 and May 2009 include:


Negative Sentiment

May 2010

May 2009

Hidden Costs

68 percent

71 percent

Process is risky

49 percent

46 percent

Home will lose value

35 percent

31 percent

“Although fewer consumers expressed interest in buying a foreclosed home than a year ago, the actual sales of bank-owned properties (REOs), along with sales of properties in the foreclosure process, continue to increase — accounting for more than 30 percent of total sales in the first quarter of 2010 according to our data,” said Rick Sharga, senior vice president for RealtyTrac. “We anticipate that there will be an increased number of both REO purchases and short sales throughout the rest of the year as the most active buying segments – first time home buyers and investors – continue to look for bargains.”

“It appears that potential homebuyers are taking a more realistic view of foreclosure purchasing,” Sharga continued. “Buying a foreclosure property still provides an opportunity for dramatic savings on a home, but the time and effort involved in executing a short sale, bidding against other buyers for an REO, or the need to do renovations may be issues for buyers not as focused on getting the best price.”

Renovations and Remodeling                                                    
The majority of U.S. adults (92 percent) said they would be willing to invest in improvements such as renovations and remodeling if they purchased a foreclosed home.  Of those consumers who would be willing to invest in improvements, 65 percent would be willing to invest 20 percent or less of the purchase price to upgrade the property and make it their own.

Renters
Renters are showing strong interest in buying foreclosed properties, with 57 percent at least somewhat likely to purchase a foreclosed home in the future. In comparison, only 40 percent of current homeowners would consider buying a foreclosure in the future.  Additionally, the likelihood to consider purchasing a foreclosure decreases with age: 65 percent of renters ages 18-34, 63 percent of renters between the ages of 35-44, and 54 percent of renters ages 45-54 are at least somewhat likely to consider purchasing a foreclosure, compared to only 31 percent of renters 55 years and older.

Uses for Foreclosure Purchase
Among U.S. adults at least somewhat likely to purchase a foreclosed home, 62 percent said they would use the property for their personal primary residence, 19 percent said they would use it as a rental investment, 8 percent said they would use it as a second home or vacation home, and 6 percent said they would buy and quickly resell (or flip). Renters were more likely to say they would purchase a foreclosed property as a primary personal residence (83 percent), while more than half of homeowners (51 percent) said they would purchase a foreclosed property for a use other than a personal primary residence.

To listen to a replay of Pete Flint and Rick Sharga discussing the results of the survey and other insights into the real estate market, click here.

For an infographic illustrating the results of this survey in a visual format, http://www.trulia.com/info/may2010foreclosure

For more information about Trulia or to experience the power of a Trulia search, please visit http://www.trulia.com/.

For more information about RealtyTrac and to access its nationwide foreclosure data, please visit http://www.realtytrac.com/.

This May 2010 survey was conducted online within the United States by Harris Interactive via its QuickQuery(SM) online omnibus service on behalf of Trulia between May 10-12, 2010 among 2,596 U.S. adults aged 18 years and older. The sample included 1,690 homeowners, 1,137 of whom currently have a mortgage, and 832 renters. The May 2009 survey was conducted online within the United States by Harris Interactive via its QuickQuery(SM) online omnibus service on behalf of Trulia between May 1-5, 2009 among 2,397 U.S. adults aged 18 years and older.  Figures for age, sex, race/ethnicity, education, region and household income were weighted where necessary to bring them into line with their actual proportions in the population. Propensity score weighting was used to adjust for respondents’ propensity to be online. This online survey is not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated. For complete survey methodology, including weighting variables, please contact Ken Shuman.

About Trulia, Inc.
Trulia.com is the most comprehensive real estate site focused on empowering you with smarter tools to help you find the right home. Whether you are an active buyer, seller or real estate enthusiast, Trulia gives you all the information you care about from rich property data to a personalized search experience.  We are focused on helping you find the home that truly meets your needs, and delivers on what’s most important for you. Ultimately, we built a smart real estate search experience bringing together local information, community insights, market data and national listings all in one place, all for you.

About RealtyTrac Inc.
RealtyTrac (http://www.realtytrac.com/) is the leading online marketplace of foreclosure properties, with more than 1.5 million default, auction and bank-owned listings from over 2,200 U.S. counties, along with detailed property, loan and home sales data. Hosting more than 3 million unique monthly visitors, RealtyTrac provides innovative technology solutions and practical education resources to facilitate buying, selling and investing in real estate. RealtyTrac’s foreclosure data has also been used by the Federal Reserve, FBI, U.S. Senate Joint Economic Committee and Banking Committee, U.S. Treasury Department, and numerous state housing and banking departments to help evaluate foreclosure trends and address policy issues related to foreclosures.

About Harris Interactive
Harris Interactive is one of the world’s leading custom market research firms, leveraging research, technology, and business acumen to transform relevant insight into actionable foresight. Known widely for the Harris Poll and for pioneering innovative research methodologies, Harris offers expertise in a wide range of industries including healthcare, technology, public affairs, energy, telecommunications, financial services, insurance, media, retail, restaurant, and consumer package goods. Serving clients in over 215 countries and territories through our North American, European, and Asian offices and a network of independent market research firms, Harris specializes in delivering research solutions that help us – and our clients – stay ahead of what’s next. For more information, please visit www.harrisinteractive.com.

Media Contacts:
Ken Shuman, kshuman@trulia.com, 415-517-7211

Paul Loeffler for Trulia, paul@sutherlandgold.com, 510-593-6765

RealtyTrac Media Contacts:
Michelle Schneider
949.502.8300 Ext. 139
michelle.schneider@realtytrac.com

Christine Stricker
949.502.8300 Ext. 268
christine.stricker@realtytrac.com

Order Custom Data:
Data Sales Department
800.913.0439
datasales@realtytrac.com

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