Wednesday, January 18, 2012
I've been posting about flipped properties lately, and here's more info and statistics about that very thing from today's L.A. Times. The short of it: investors, most of whom are likely property flippers, are crowding the low end of the market. The title should link; if not, click here. Some salient quotes:
"The one thing that is certainly true at the moment — because rents are rising and house prices are flat or falling — is yields on houses are pretty good right now," said Richard Green, director of the USC Lusk Center for Real Estate. "It creates a problem for ordinary people, because a lot of investors are buying with cash, and so cash buyers can buy for less money." So if it seems like there are no inexpensive homes on the market, that's why.
And "...buyers who paid all cash purchased 29% of all Southland homes in December." Statistically, many of those cash sales were in the middle- and high-price catagories, too. I am constantly amazed by how much cash is out there.
And, perhaps the most important stat of all: "Nearly 1 in 3 homes sold last month on the resale market was a foreclosure and about 1 in 5 was a short sale."
The article also discusses price declines in December, but that usually happens at the end of the year. My take-away is good and bad. Obviously, even though there should be great deals on properties out there, the competition for true bargains in all price catagories is fierce and cash is king. The good news for regular buyers is that many/most of these investors are doing some very nice rehabbing of properties. They are spending their cash on the fixes needed so you can spend yours on your mortgage -- and tax deduction.
I think I need to start going to foreclosure auctions.