More than half (55 percent) of those surveyed by real estate search service Trulia indicated that they were at least somewhat likely to purchase a foreclosed home, up from 47 percent in the previous study back in November.
Unfortunately, 40 percent of respondents seem to be delusional, expecting to pay at least 50 percent less for a foreclosed home, compared to the 31 percent discount expected back in November.
But 85 percent of respondents are concerned with the negative aspects of buying a foreclosed home, up from 80 percent in November.
Hidden costs were the number one drawback to buying a foreclosed home, followed by the associated risk and concern that the home will lose value.
As a result, 83 percent believe they should receive at least a 25 percent discount in exchange for the risk of purchasing a foreclosed property.
“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,” said Rick Sharga, senior vice president of RealtyTrac, in a release.
“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.”
Younger prospective homebuyers are most interested in foreclosed homes, with two-thirds of those aged between 18-44 willing to buy a distressed property, versus just one-third of those 55 and older.
Current renters also expressed more interest in purchasing foreclosed homes, with 68 percent more likely to buy such a property versus just 49 percent of current homeowners.
“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.
But home prices are expected to drift even lower, so it may be better to wait and grab a better deal down the road.