SF Bay Area yet to get cooling off foreclosure fever

Bargain priced foreclosure homes are being snapped up from lending banks, who consider them non-performing assets, to be disposed off quickly. This trend is reported from various housing markets and market watchers are of the opinion that signs of rebound on home sales are appearing. Realtytrac and Trulia conducted a latest Survey in May 2010, which shows both home owner and home buyer perspective on foreclosures is changing.

Buying or selling a property through foreclosure is different from the traditional one. The intricacies, procedures, hassles and headaches are more, although there is unquestionable cost savings. How far these elements might play in the minds of people and what is the impact of them in San Francisco housing market for the next few years?

This is the question tried to be answered through the above survey, where the two organizations combined along with Harris Interactive, to poll a sample group of US adult homeowners – most of them currently have a mortgage on their property – together with a sample pool of renters.

The survey results showed “a notable decrease in consumer willingness to buy foreclosed properties compared to one year ago”. Also 45 percent of people polled that they are “at least somewhat likely to consider purchasing a foreclosed home in the future”. This percentage was 55 during the year 2009.

What made the decline of this foreclosure mania? The obvious reasons are – eviction of the current tenant from the foreclosed property is on the buyer; (In San Francisco the renter protection laws are very strong and so in case the occupant is a renter, the process of eviction will be sticky of course); pre-purchase inspection may not be possible; outgoing owners would not have maintained it properly for reasons known.

The reasons continue as –  repairs and rehabs of property will fall on the buyer and there may not be any guarantees; resale ability of those properties might be hampered for the above reasons or a glut of such foreclosures in the neighbourhood; and lastly the lending, buying and selling of these properties are difficult, different and cumbersome.

Interestingly, more than 50 percent of renters surveyed said “they would be interested in a foreclosure property”.

Posted by Amitesh Kumar on Jun 4 2010. Filed under Foreclosures, Lending. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry