A new study by Realtor.com revealed that nearly two-thirds of the current potential new homeowners are looking at homes that have been through the foreclosure process. This is a dramatic increase from 2009 when only 25 percent of new homebuyers were looking at foreclosed properties. A reduction in supply of non-foreclosure properties for sale as well general perception changes towards the purchase of real estate owned (REO) properties are the causes of this dramatic shift according to Realtor.com CEO Steve Berkowitz.
The survey also found that the majority of REO interest was for homes to live in and not straight investment purchases. Only 6.9 of the potential buyers reported they were looking at REOs strictly for their investment potential. Fear of foreclosures bringing down overall market values was reported by 56 percent of respondents. Not surprisingly prospective purchasers expected to receive discounts of 10-30 percent vs. market value when purchasing a foreclosed property.