The one buying sector that’s been missing from real estate the last few years were the investors. The real estate investors were largely blamed for the downturn in the housing market, due to a slew of buying and flipping properties. This maneuver helped pump up prices and over inflate home values. Investors are defined as buyers who purchase and do not live in those homes fulltime. In 2011, nearly half the bank owned homes and more than a quarter of resale properties were sold to investors. Most buyers investing in the early and mid 2000’s were using the market as a get-rich scheme, now investors are buying as a long-term investment.
Many of those purchases are being made by investors, who are targeting the cheapest properties in areas hit hardest by foreclosures with many investments being purchased with all-cash offers. There are two reasons for so many cash bought properties, one being the difficulty with buyers obtaining financing to purchase, and the most important factor being the maximum number of investment homes per owner with outstanding loans are limited at four. Banks are now giving exceptions to that rule and allowing investors to own more than four properties that are mortgaged at one time, this will certainly enhance the likelihood that experienced investors will continue being active buying homes.
Investors deserved some criticism for the real estate collapse, but they also deserve praise for jump starting the market from the doldrums of the last six years. Housing markets in Yolo County and around the country are heating up with more activity from investors. Despite record low-interest rates, many consumers simply don’t have enough confidence in their economic outlook to buy houses, where as shrewd investors have flooded the market and purchased investment properties, which cleared the backlog of inventory. The low-inventory has sparked a resurgence in Davis, California and Yolo County. The supply and demand theory has increased the likelihood of competing offers on the same home. Investors have almost single-handedly heightened demand.
With the stockpile of bank-owned properties ready to be released this year, investors will still be the core of the housing recovery. With the drop in prices since 2006 and astronomically low-interest rates, more first-time investors will join their more experienced counterparts and take advantage of the multitude of investment opportunities and help stimulate an economic and housing improvement. Please visit my website www.JohnnyBrooksHomes.com for helpful tips on buying or selling a home, scan my informative blogs and easy access to view local area homes for sale in Davis, California and the surrounding communities.