Commentary: Investors Still Flooding the National Housing Market


As long as prices are relatively low investors can see an opportunity to make a reasonable profit they will keep buying. If financing for home buyers become a lot more restrictive or the interest rates go way up look for the investors to vanish. For a more detailed look at this subject please read the article below.

The FHA Condos Approval Company, Inc.

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Investors remain a crucial factor in the U.S. housing market. Both large institutional and smaller “mom and pop” investors have been very active purchasing homes at a steep discount, primarily in housing-bust markets that have seen dramatic decreases in prices over the past several years.

RealtyTrac recently released its September Residential and Foreclosure Sales Report, reporting that nearly half of the home sales in September were all-cash transactions, signaling significant investor presence. This proportion is up significantly from 40 percent in August and 30 percent in September 2012.

While all-cash purchases and institutional investors usually go hand-in-hand, RealtyTrac reports that institutional investors (defined by the firm as purchasing 10 or more properties in the last 12 months) accounted for 14 percent of sales in September, the highest percentage since the company’s data tracking began in January 2011.

While RealtyTrac’s definition of institutional investors certainly captures the larger institutions purchasing houses in bulk, we consider the all-cash share of purchases a better gauge for non-occupier home purchase activity, since smaller investors that purchase one home at a time, repair and remodel it, offer it for re-sale, and then repeat the process will generally not fall into the 10-plus purchases per year category but often purchase all-cash.

To read the complete article please use the link below.

Investors Still Flooding Housing Market

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