In the current market, investment properties are a better option than ever.
Courtesy of Reuters News Service:
U.S. property investors these days are smaller and say they are more willing to wait it out — a stark contrast from the fervent flipping and reckless borrowing that characterized housing investment a few years ago.
Wall Street — blamed for much of the bubble at the heart of the worst economic downturn since the Great Depression — is mostly watching from the sidelines when it comes to homes. But it still dominates the market for bad, or distressed, loans.
For those with cash, time and room for risk, prices now are too good to pass up, providing incipient, albeit possibly temporary, relief for a market key to economic recovery.
“Investors have started to return … they see prices have fallen so far below the trend that they consider Phoenix housing to be a good investment,” said Karl Guntermann, the professor of real estate finance at Arizona State University.
Across the nation, home prices rose for a third straight month in July, encouraging investors to buy property. The S&P/Case-Shiller index of house prices in 20 metropolitan areas rose nearly 4 percent in the period.
While much of the renewed housing market activity is being driven by first-time buyers lured in by low interest rates and an $8,000 federal tax credit, absentee buyers — investors and second-home owners like Cano — made up 41 percent of all purchases in the Phoenix area in August.
So intense is activity in some areas in the Southwest and California that distressed homes often receive multiple offers as first-time buyers compete with investors.
“Two years ago, there were five people at auctions … today, there are 70 of us,” said Todd Kaufman, who turned investor in California real estate after 23 years on Wall Street, where he ran last ran the mortgage securitizations unit of failed bank Washington Mutual.
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