Foreclosed homes growing more popular

The foreclosure crisis hasn't hit bottom yet, which could be beneficial to more first-time homebuyers or investors seeking deep discounts, according to a survey released Wednesday by Trulia.com, RealtyTrac and Harris Interactive.

And that's key to our country's economic recovery, said Pete Flint, co-founder and chief executive officer of Trulia.com, a real estate search site.

"The good news is, there are significant price reductions out there and all of these homes have had at least one price cut," Flint told reporters during a conference call. "But the bad news is, we don't see a bottom yet. But things are definitely getting less worse."

The groups issued a joint survey that showed adults nationwide had similar views as those in the Midwest.

About 55 percent of adults nationwide, and about 53 percent in the Midwest, said they were likely to consider purchasing a foreclosed home.

About 40 percent nationwide, and 41 percent in the Midwest, said they expected to pay about half for the foreclosed home.

However, about 83 percent felt there were negative aspects of buying a foreclosed home, such as extra rehabbing expenses, compared to 72 percent in the Midwest.

The survey indicated that first-time home buyers and investors were the most likely to consider buying a foreclosed home, said RealtyTrac Senior Vice President Rick Sharga.

"Half of what's moving is distressed properties," Sharga said. "We are seeing an unprecedented level of interest. Our (Web) site traffic has been heavy, like we've never seen before."

The results released on Wednesday show a different picture compared to the survey in November 2008. While interest in foreclosed properties has increased, a negative sentiment around foreclosed properties persists.

At that time, only 47 percent of adults nationwide said they would consider buying a foreclosed home.

Also, 80 percent of adults nationwide felt there were negative aspects of purchasing a foreclosed home.

Flint said people were more likely to buy foreclosed homes in states where foreclosure was much higher, such as Nevada, California and Florida.

"Some of those places showed that transactions have tripled," Flint said.