Property investors in US see foreclosures as ideal bargain, survey reveals
More than a quarter of real estate buyers in the US want to purchase a bargain foreclosure property, according to a new survey.
Low prices motivate buyers more than any other reason with 25.3% saying that they want a foreclosure as it represents excellent value, the research from Move.com shows.
Also more want to buy a property as an investment with 12% looking for this kind of property, up from 5.6% just seven months ago, the survey also shows.
More than half, some 57.6%, of those buying a foreclosure plan to live in the property while 42% said the property would be an investment.
Roughly 13% of them plan to convert the foreclosure into a rental property, 11.3% of the buyers will fix them up for re-sale and 17.4% said that they would house a family member in the property until it can be sold for a profit.
The survey also found that 73% of those buying a foreclosure believe their properties will appreciate 10% or more in five years, while 28% expect a 20% appreciation during the same amount of time.
According to the survey, 23.6% of all prospective homebuyers and investors believe that prices are as low as they can go, and 18.7% want to take advantage of foreclosure bargains.
‘ The survey shows that affordable prices and ample inventories are restoring the appeal of real estate to investors while providing opportunities for first time home buyers to enter the market,’ said Errol Samuelson, the CEO of Move.
‘In today’s environment, regardless of whether you’re an investor or interested in purchasing a home to live in yourself, residential real estate is a more attractive investment today for many than it has been in recent years,’ he added.
But there are fewer bargains around as the latest figures show that foreclosure filings in the US fell for the third month in a row in October.
The data from Realty Trac shows they decreased 3% in October.
Nevada, California and Florida continue to have the highest number of foreclosures although the rate is declining.
Foreclosure activity in Nevada fell 26% but it still tops the nation’s foreclosure table with one in every 80 homes in foreclosure.
But it’s a 4% decrease from October 2008, the first ever year-over-year decline in Nevada since RealtyTrac began calculating the change in January 2006.
California came in second for the second month in a row. One in every 156 homes received a foreclosure filing in October, a 1% drop from September but still nearly 50% above the level seen in October 2008.
Florida had the third highest foreclosure rate with one in every 168 homes foreclosing, a 6% decrease from the month before and a 4% drop from a year ago. It marked the first year-over-year decrease for Florida since July 2006, according to the report.
‘Three consecutive monthly declines is unprecedented for our report, and on first blush an indication that the foreclosure tide may be turning,’ said James Saccacio, chief executive officer of RealtyTrac.