Fifty-four percent of Americans believe housing recovery will not happen until 2014 or later: Trulia/RealtyTrac survey; six months ago, 42% said housing market would turn by 2012 or had already turned, compared with 23% today
May 18, 2011
– Trulia, a top resource for homebuyers, sellers and renters, and RealtyTrac, the leading online marketplace for foreclosure properties, today released the latest results of an ongoing survey that has tracked American attitudes toward foreclosed homes since 2008. Harris Interactive® conducted this online survey on their behalf from April 15 to 19, 2011, among 2,018 U.S. adults aged 18 and over.
American Expectations for Housing Market Recovery Falters
As more cities across the nation experience double dips in home prices(1), more than half (54 percent) of U.S. adults believe recovery in the housing market will not happen until 2014 or later, according to the survey released today. In a previous survey conducted six months ago(2), 42 percent of American adults said they thought the market would turn around by 2012 or had already turned around. Now, only 23 percent continue to think this will happen.
Current Government Foreclosure PreventionPrograms Not Enough
With recent reports criticizing the underperformance of the Obama administration's Home Affordable Modification Program (HAMP) and the Home Affordable Foreclosure Alternatives Program (HAFA), Republicans are increasingly adamant about repealing these initiatives entirely. This debate appears to run contrary to what Americans ask of their government as the housing market struggles to recover. According to the survey released today, 45 percent of American adults say the government is not doing enough to prevent foreclosures. Only 17 percent say too much is being done while 16 percent say they are doing the right amount and 22 percent say they are not sure.
The widespread prevalence of distressed homeowners facing foreclosures in today's market is one reason why negative sentiment toward the government may be so high. Almost one-third (30 percent) of homeowners self-reported that they have or know someone who has applied for or received a loan modification, stopped paying their mortgage, foreclosed, walked away or short sold their home.
Expectations for Buying a Foreclosure
More than half of U.S. renters (56 percent) and 47 percent of current homeowners are at least somewhat likely to purchase a foreclosed home. Along with having some concerns about hidden costs, a risky buying process and loss in home value, many potential buyers expect to save money if they buy a foreclosure versus a similar non-foreclosed home. In fact, American adults expect to pay 38 percent less for a foreclosed home than a similar home that was not in foreclosure -- not too far above the average discount of 36 percent on sales of bank-owned homes (REO) compared to sales of homes not in foreclosure reported in the RealtyTrac 2010 Foreclosure Sales Report.
* FROM PETE FLINT, CEO OF TRULIA
"Most Americans, as our latest survey revealed, overestimated how quickly the housing market would bounce back, but when it does, it will likely be a long and gradual process. Looking at the recent double dips in home prices, I expect the rest of 2011 to be volatile for real estate," said Pete Flint, co-founder and CEO, Trulia. "On the flip side, mortgage rates won't stay low forever and even if home prices continue to fall for a bit, now is still a good time to enter the housing market. In my eyes, we have another 18 months until we start to see signs of price stability in the housing market."
* FROM RICK SHARGA, SVP OF REALTYTRAC
"Our survey reflects a growing perception among potential homebuyers that the housing recovery is still a long way off," said Rick Sharga, senior vice president of RealtyTrac. "Demand remains weak, loans are increasingly difficult to qualify for, and the shadow inventory of several million distressed properties is weighing down the market. All of these things need to improve before housing can recover."
* FROM KEN SHUMAN, TRULIA SPOKESPERSON
"According to our latest data, it is more affordable to buy a home than to rent in 78 percent of major U.S. cities," said Ken Shuman, Trulia Spokesperson. "With concerns of rising inflation and the potential for rising interest rates, now is a good time for people to buy and we may not be in this environment for much longer. Whether you are looking at foreclosed properties, short sales or existing homes, make sure you have enough cash in the bank for eight to 12 months of mortgage payments and don't buy a bigger sized home than you really need."
* To download an infographic illustrating the above findings, click here.
* To view a slideshow of the findings, click here.
* To listen to a replay of Pete Flint and Rick Sharga discussing the results of the survey and other insights into the real estate market (available after 5/18), click here.
* To check out Trulia's current and archived industry reports and consumer surveys, click here.
* To see consumer tips on how to navigate the summer clearance sale on real estate, click here.
This April 2011 survey was conducted online within the United States by Harris Interactive via its QuickQuery(SM) online omnibus service on behalf of Trulia between April 15-19, 2011 among 2,018 U.S. adults aged 18 years and older. The sample included 1,257 homeowners, 906 of whom currently have a mortgage, and 704 renters. Figures for age, sex, race/ethnicity, education, region and household income were weighted where necessary to bring them into line with their actual proportions in the population. Propensity score weighting was used to adjust for respondents' propensity to be online. This online survey is not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated. Click here for the full methodology.
About Trulia, Inc.
Trulia is the fastest growing online real estate resource, empowering buyers, sellers and renters with smarter tools to help them find the right home. Trulia helps you find the home that best meets your specific needs. Our smart and personalized real estate search experience brings together local information, community insights, market data and national listings all in one place. Trulia is headquartered in downtown San Francisco and is backed by Accel Partners and Sequoia Capital.
About RealtyTrac Inc.
RealtyTrac is the leading online marketplace of foreclosure properties, with more than 2 million default, auction and bank-owned listings from over 2,200 U.S. counties, along with detailed property, loan and home sales data. Hosting more than 3 million unique monthly visitors, RealtyTrac provides innovative technology solutions and practical education resources to facilitate buying, selling and investing in real estate. RealtyTrac's foreclosure data has also been used by the Federal Reserve, FBI, U.S. Senate Joint Economic Committee and Banking Committee, U.S. Treasury Department, and numerous state housing and banking departments to help evaluate foreclosure trends and address policy issues related to foreclosures.
About Harris Interactive
Harris Interactive is one of the world's leading custom market research firms, leveraging research, technology, and business acumen to transform relevant insight into actionable foresight. Known widely for the Harris Poll and for pioneering innovative research methodologies, Harris offers expertise in a wide range of industries including healthcare, technology, public affairs, energy, telecommunications, financial services, insurance, media, retail, restaurant, and consumer package goods. Serving clients in over 215 countries and territories through our North American, European, and Asian offices and a network of independent market research firms, Harris specializes in delivering research solutions that help us -- and our clients -- stay ahead of what's next. For more information, please visit www.harrisinteractive.com.
(1) S&P/Case-Shiller Home Price Indices, published April 26, 2011
(2) Survey conducted online for Trulia and RealtyTrac by Harris Interactive from November 2-4, 2010
(3) The percentage of Americans who believed recovery would happen in 2010 during the November 2010 survey were bundled into the "Already Recovered" category in order to do a year-over-year comparison with the April 2011 survey.