Repo homes for sale have been attracting more and more investors across the country, according to Move.com.
Based on the Move.com study, the number of investors buying foreclosures rose by 200 percent since March this year. Their chief reasons for entering the residential real estate market are low foreclosure prices and availability of housing units for sale.
The study also found that one in every 8 homebuyers or 12.1 percent planned to buy a house for investment purposes. This percentage is a significant rise from 5.6 percent in March. Of these homebuyers, more than 8 percent were women and nearly 16 percent were men.
Comprising more than 25 percent of all homebuyers, foreclosure home buyers have become a significant group in sparking movement in the housing market. An estimated 42 percent of prospective foreclosure buyers plan to buy for investment while nearly 58 percent plan to occupy the homes they buy.
Among prospective foreclosure investors, more than 13 percent plan to turn repo homes for sale into rental houses, more than 11 percent plan to repair the foreclosures and the resell them and nearly 18 percent plan to have family members occupy the properties while waiting for home prices to go up and then resell the homes at a bigger profit.
Of the 42 percent prospective investors in foreclosure homes, the age group 35 to 49 was the largest in the survey, accounting for nearly 53 percent of all respondents with plans to invest in foreclosures.
Most of the prospective investors plan to profit by finding bargain-priced properties and then wait for home price appreciation for at least 5 years. More than 58 percent expect to buy at a discount of 20 percent compared to market price levels while almost 39 percent expect a discount of 25 percent. Seventy-three percent expect a price appreciation of at least 10 percent in five years while 28 percent of investors expect their houses to appreciate by 20 percent.
If investors look at price appreciation records in the country, houses have appreciated by 15 percent on average nationwide since 2004, based on data from the Federal Housing Finance Administration.
The study also found that many Americans are still not aware of improvements in home affordability nationwide. Because of record numbers of repo homes for sale, home affordability has risen considerably. Today, an American household earning the median income can afford to buy about 70 percent of houses listed on Move.com web sites.
Original Post: Repo Homes for Sale Attracting More Investors, Survey Says on ForeclosureDeals.com.
