Latest Headlines on OCRegister.com
[x] Close
Lansner on Real Estate ~ The latest news about the housing market from Orange County Register columnist Jon Lansner.
« Previous Post
Next Post »

More shoppers considering bank-owned homes

May 20th, 2009, 11:00 am · 25 Comments · posted by Marilyn Kalfus, real estate reporter

Homebuyers are still wary of risks or hidden costs in buying foreclosures. But more now say they’d consider a repo’d or distressed home — 55% vs. 47% last year, a national survey shows.   bankowned

The survey, released by online home tracker Trulia.com and Irvine-based foreclosures Website RealtyTrac, was conduced by Harris Interactive.

“The good news is there is growing and continued intererest in people purchasing these properties.,” said Rick Sharga, vice president of RealtyTrac. But he noted, ”There is a shadow inventory of bank-owned properties that is yet to come to the market.”

So far, the large distressed inventory has led to significant discounts. Across the country, 24% of existing homes on the market have seen at least one price reduction in order to stay competitive, said Pete Flint, Trulia’s CEO. Foreclosed homes are expected to be a factor in the market for another two years, especially as high-risk Option ARMs and Alt-A loans reset.

“We don’t quite see a bottom yet,” Flint said. “But the good news is things are definitely getting less worse.”

(Note: In Orange County, the Register reported earlier this week, eager buyers have been grabbing up repo’d homes, keeping the county’s foreclosure inventory in check)

Survey highlights:

  • 40% expect to pay at least 50% less for a foreclosed home, compared to only 31% expecting that type of discount in November 2008.
  • Though interest in buying repo’d homes has increased, the study also found higher levels of negative sentiment around purchasing foreclosures. 85% now feel there are negatives to buying a foreclosed home, compared to 80% last year.
  • Among those 85%, 71 percent cite hidden costs as their top concern, 46% think it’s a risky process and 31% are concerned that the home will lose value.
  • Two-thirds of U.S. adults between the ages 18-44 (66%) would consider purchasing a foreclosed home, compared to a little more than one third of those ages 55 and older (38%). Respondents aged 45-54 fell in between, with 53 percent indicating that they would be at least somewhat likely to consider a foreclosed property.
  • Current renters (68%) are more likely to consider buying foreclosed home than current homeowners (49%).
Would you consider buying a distressed home?
View Results

page-teaser-vert

Read more:

  • Is worst of housing meltdown over for beach cities?
  • Newport housing runs hot and cold
  • O.C. homebuying surge near 10-month low
  • O.C. homes are 2nd-least affordable in Calif.
  • Lower mortgage rates? Vote now
  • Will Fed buy Treasuries to lower mortgage rates?
  • Loan demand softens
  • Surf City home sales down in all ZIPs
  • Coastal ZIP is county’s worst for foreclosure resales
  • Median home price up in half of Irvine ZIPs
  • Prices up in 9 O.C. ZIPs in late April
    • ADVERTISEMENT

    You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

     25 Comments

    • MelodyofLove says:
      May 20, 2009 at 12 pm

      “The problem,” he continued, “is that we still face two big threats to price stability: layoffs, which can cause foreclosures across the home price spectrum, and possibly a new round of foreclosures triggered by defaults on ‘option ARM’ and ‘stated income’loans used in mid-to high-end markets. Also of concern are reports of lenders holding back for many months before making a public foreclosure filing, which we track. If job cuts remain deep and foreclosures spike, then the past few months might later be viewed as nothing more than a brief calm before the next foreclosure storm.”

      http://www.dqnews.com/Articles/2009/News/California/Southern-CA/RRSCA090519.aspx

      Jon, you misspelled distressed…….

      • NationalBubble.com says:
        May 20, 2009 at 12 pm

        there are going to be a lot more foreclosed homes for sale in 3 months. Banks are supposed to release a huge number of foreclosures in the next couple of months. Fasten your seat belts!!!

      • dapper1 says:
        May 20, 2009 at 12 pm

        Supervisor Moorlach is warning that if the state suspends 2004’s Proposition 1A — which allowed localities to keep a greater share of property taxes — and took money from cities and counties, 40 percent would have no other option other than to file for Chapter 9 bankruptcy
        .
        .
        It will get worse.

        • MelodyofLove says:
          May 20, 2009 at 12 pm

          OC filed bk once before didn’t they? I don’t like what I see in our future at the moment. How is OC doing at the moment? I’m sure they’re getting all that property tax money - NOT!!!

    • NationalBubble.com says:
      May 20, 2009 at 12 pm

      It’s sad to see the California’s economy collapsing like this. God help us!!!

    • MelodyofLove says:
      May 20, 2009 at 1 pm

      “What Happened and Why Does It Matter? How did Orange County wind up in bankruptcy and how did it emerge from bankruptcy only 18 months later? As municipal financial crises go, the story is—on the surface—unprecedented. Looking only at the surface, one could conclude that this was just a matter of a rogue trader runamok, in a county of high-income voters who do not want to pay their bills, in a state where a Democratic state legislature did not want to bail out an arch-Republican county. In other words, it is something unlikely to have much relevance for the rest of the political and financial world. However, a deeper look at what happened counters that conclusion.

      His strategy was to use the funds on deposit to borrow money to invest in derivatives, inverse floaters, and long term bonds that paid high yields. He then borrowed more money, with the borrowed money as collateral (see Table 1). For reasons related to the aftermath of Proposition 13, Orange County relied more than other counties in the state on interest income: In FY94, interest amounted to 12 percent of revenue for Orange County—in contrast to 3 percent for all other California counties. Citron was driven by the need to raise more interest income for local governments, whose tax allocations had recently been cut again by the state. For the FY95 budget,he promised that interest earnings would account for 35 percent of the county’s general fund revenues (Figure 1). In this context, he took more risks. The size of the pool increased to $20.6 billion in 1994, as he borrowed $2 for every $1 on deposit (Figure 2). In essence, as The Wall StreetJournal noted, he was “borrowing short to go long” (Editorial, The Wall Street Journal, December 9, 1994) and investing the dollars in exotic securities whose yields were inversely related to interest rates.”

      So, how many ” high-income voters who do not want to pay their bills” do we have? And then there’s that fuzzy math (exotic securities, derivatives, etc)

      I see the high income voters not paying their bills again, but I hope OC didn’t do any of that fuzzy math stuff.

      • dapper1 says:
        May 20, 2009 at 1 pm

        I’ve said it before and I’ll say it again… PROP 13 is the killer in CA. plus the high taxes and all of the regulations dumped on business.
        .
        All of this will continue to drive people out of the sunshine state and will further depress home prices and inflate unemployement.
        .
        Sorry DT and Gunner… we have not seen the bottom, but it is out there somewhere; lurking in the shadows waiting to DROP.

        • Liar Loan says:
          May 20, 2009 at 5 pm

          Well businesses benefit from Prop 13 just like everyone else. Maybe low property taxes are an incentive for some companies to stay.

          • MelodyofLove says:
            May 20, 2009 at 5 pm

            I don’t like the thought of taxing the “older” person on a fixed income. We would have more people leaving their homes if that were the case. We need to take care of our mom, dads, etc.

    • Captain says:
      May 20, 2009 at 2 pm

      Says:

      Too soon.

      My bro has an offer in on an REO property in Coto.
      I believe he is a knife catcher……
      I believe it is too soon……………….
      I believe it will fall at least another 10% MIMIMUM

      However…

      His wife is a prego…they need to move….

      So…Again CA RE is not always an investment
      Sometimes it is just housing and a need that needs to be met.

      • MelodyofLove says:
        May 20, 2009 at 2 pm

        If they can afford it and they don’t mind taking a hit…. so be it.

        But don’t let em come crying to you when they notice a loss of value.

        There are times, when you do have to move. When we bought our house up north, I had no idea that my husband was going to be transferred. Stuff happens.

        As long as people know the risks, the pros and cons, and they can afford it… good for them.

    • Captain says:
      May 20, 2009 at 3 pm

      Melody:

      When one chooses to scale out / up in properties.
      That would be # 3 for them & timing is not as pertinent as the 1st time buyer.

      However

      All your points duely noted…!!

      You still acused me of living aboard a small stinky boat….!!!

      lol lololololo ahhahahahhahahahahahahahahahahahahha!!!!!!!!!

      • MelodyofLove says:
        May 20, 2009 at 3 pm

        If you enjoy that life - go for it. I prefer to live on land. Different strokes for different folks.

      • MelodyofLove says:
        May 20, 2009 at 3 pm

        I didn’t say stinky boat… I said stinky ocean water. Atleast it’s not as bad as Mexico’s water. I didn’t mean to insult… sorry.

      • VoiceofReason says:
        May 20, 2009 at 4 pm

        Melody reminds me of that SNL character Debbie Downer…..
        “Oh dear, oh my, the ocean stinks, at least not as much as that grimey Mexico…. My husband was transferred….. People shouldn’t make up their own minds…..they might be happy……there was a bankruptcy 15 years ago…..now it’s all going to crash down…..I believe everything I read in the paper, as long as it’s bad news……oh dear, oh my”
        Ok, it’s Hardy Har Har!!! hahahahaha

        • MelodyofLove says:
          May 20, 2009 at 5 pm

          Geesh, I never said people shouldn’t make up their own minds…

          You got off the bus and fell somewhere in between.

          Why do you sound so bitter? Having a bad day or what? Twist my words if you find the need, but then, those are not my words…. they’re now yours.

    • Dealtracker says:
      May 20, 2009 at 4 pm

      Well, we have done it. We have broken through 9.700 active listings. Total available listings = 9,694. This has been a shocking last four weeks. Next stop: 9,600.

    • hwood says:
      May 20, 2009 at 4 pm

      METHTRACKER

      WELL U HAVE DONE IT AGAIN …U HAVE SHOWN THAT ANYONE CAN MAKE UP NUMBERS AND U DO A GREAT JOB OF IT……
      YOU HAVE SCHOCKED US ALL WITH UR BOGUS NUMBERS AND RANTING….

      NEXT STOP INSANE ASYLUM……

    • hwood says:
      May 20, 2009 at 5 pm

      VOICE OF NO REASON
      THIS PERSON REMINDS ME OF A PERSON WHO HASNT WOKEN UP YET AND NEEDS TO WIPE SAND OUT OF EYES AND SEE WHATS REALLY GOING ON..COME ON GET REAL GOOFBALL

      • MelodyofLove says:
        May 20, 2009 at 5 pm

        He needs to go take that boat out and have some fun or something….

    • bpsqwerty says:
      May 22, 2009 at 10 am

      of course they’re considering bank-owned homes. what else is there?