A pair of real-estate related websites, Trulia.com and RealtyTrac, on Tuesay said the latest results of an ongoing survey tracking homebuyers' attitudes toward foreclosed homes indicate that 58% of U.S. adults expect recovery in the housing market to take at least another two years. Half have less faith in mortgage lenders, banks and the government, and 35% believe the robo-signing issue will delay the housing market's recovery while only 6%o think it will have no effect.
Among the survey respondents, only 4% thought the market had already recovered and another 1% predicted recovery by the end of 2010; 10% put recovery in 2011, 27% in 2012, 24% in 2013, 12% in 2014 and 22% in 2015 or later.
"More and more, American homeowners, sellers and buyers are tamping down their expectations for a swift recovery in the housing market and bracing themselves for a long, slow climb back to a healthy real estate market," said Pete Flint, co-founder and CEO of Trulia. "Government incentives have come and gone and historic lows in interest rates have done little to spur recovery. Then, as if prospective buyers and sellers needed more to be concerned about, the robo-signing issue caused a 'what's next?' fear to surface in the minds of consumers who, frankly, have lost faith in banks and their government to make good decisions."
Of homeowners with a mortgage, 48 percent% admitted that they would consider walking away if their mortgage was under water, an increase compared with May 2010, when only 41% said so. Men (57%) are more likely than women (40%) to consider strategic default.
Nearly half (49%) said they were least somewhat likely to consider purchasing a foreclosed property, up from 45% in May, but an increasing number also recognize negative aspects to buying a foreclosure. Over the past six months, the number of U.S. adults who believe there are downsides to buying foreclosed properties has increased to 81% from 78% in May 2010.
Would-be foreclosure buyers expect a deal. Nearly all expect a discount (97%); 67% expect to pay at least 30% less and 35% expect a discount of half what a normal home would cost.
"It seems like consumer expectations and market realities are beginning to align when it comes to foreclosure discounts," said Rick Sharga, senior vp for RealtyTrac. "During the third quarter, foreclosure homes sold for an average of 32 percent less than homes not in foreclosure. It's also not surprising that we've seen an increase in negative sentiment toward foreclosure purchases, where the recent robo-signing controversy has added more confusion to an already complicated process."
The survey was conducted online by Harris Interactive. The survey sample included included 1,329 homeowners, 1,000 of whom currently have a mortgage, and 652 renters.