Trulia.com, along with RealtyTrac, today released the latest results of a tracking study conducted on their behalf by Harris Interactive® showing notable gains in consumers’ willingness to buy foreclosed properties, with 55 percent of U.S. adults indicating that they are at least somewhat likely to consider purchasing a foreclosed home in the future, compared to the 47 percent of U.S. adults who indicated the same in November 2008. In the current market, U.S. adults believe foreclosed homes are an even greater bargain opportunity than before, with 40 percent expecting to pay at least 50 percent less for a foreclosed home, compared to only 31 percent of U.S. adults surveyed in November 2008. The May 2009 survey also found that 74 percent of U.S. adults familiar with President Barack Obama’s Mortgage Relief Program are at least somewhat confident it will give homeowners the incentive to renegotiate with mortgage lenders in order to prevent their homes from going into foreclosure.

While overall consumer interest in buying foreclosed homes has increased, the current wave of the study also found higher levels of negative sentiment around purchasing foreclosed properties. In November of 2008, 80 percent of U.S. adults felt that there were negative aspects to purchasing a foreclosed home. In the current survey, the number of U.S. adults concerned with negative aspects has risen to 85 percent. Among these 85 percent, 71 percent cite hidden costs as their top concern, 46 percent believe the process is risky and 31 percent are concerned that the home will lose value. Not surprisingly, consumers expect hefty discounts on foreclosed homes, with 83 percent believing they should pay at least 25 percent less for a foreclosed property, perhaps to compensate for perceived risks.

“As interest in purchasing foreclosed homes increases, competition is heating up with traditional sellers competing with bank-owned prices. Across the U.S., 24 percent of existing homes for sale on the market have seen at least one price reduction in order to stay competitive, creating a tremendous opportunity for consumers to buy homes at significantly lower prices,” said Pete Flint, co-founder and CEO of Trulia. “Competition amongst sellers, along with the newly created economic incentives, has created the most significant discounts that we’ve seen in decades, presenting opportunities for first-time home buyers and families looking to trade up to a bigger home.”

“Although consumers are aware that there may be some challenges involved in purchasing a foreclosed home, they are very interested in the bargain opportunities available in the foreclosure market. People want the best deals they can find and they are willing to go outside of their comfort zones if it means they can buy more home for less money,” said Rick Sharga, senior vice president of RealtyTrac. “Consumers who educate themselves on the opportunities available will likely be rewarded.”

Most Likely to Buy Foreclosures

• Two-thirds of U.S. adults between the ages 18-44 (66 percent) would consider purchasing a foreclosed home, compared to a little more than one-third of those ages 55 and older (38 percent). 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 percent) are more likely to consider purchasing a foreclosed home than current homeowners (49 percent).

• U.S. adults with children under 18 living in their household also show an increased likelihood to consider foreclosure properties, with 66 percent indicating they would be at least somewhat likely to purchase one, compared to 49 percent of those without children under 18 in the household.