Hope and home foreclosures

“Finally some good news” on home foreclosures, said Diana Olick in CNBC. The growing “glut of foreclosed inventory” is the biggest obstacle to real recovery in the housing market, so it’s big news that more people say they’re willing to buy houses in foreclosure, according to a new survey from Trulia.com and RealtyTrac. “Why? Bargains!” Some 40 percent of those surveyed said they expect to see a 50 percent discount on foreclosed homes.

That may be a bit optimistic, said Barbara Kiviat in Time. Nationwide, foreclosed houses are selling at a 31 percent discount to similar nonforeclosure houses, RealtyTrac says. That’s still “a heftier discount than I imagined,” but not all those houses are bargains. A lot of buyers underestimate how much it will cost to fix up their purchases.

“Foreclosed homes still have an image problem,” said Tracey Taylor in the San Francisco Chronicle, as 85 percent of respondents see negatives—hidden costs, depreciation, and a “risky” buying process—in buying one. But brokers are becoming more “savvy” about selling them, and they have a willing market in the “younger crowd,” especially renters and first-time buyers.

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