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Investors driving up prices

By Judy Martel · Bankrate.com
Wednesday, June 12, 2013
Posted: 3 pm ET

Home prices in some of the hottest areas of the country are improving rapidly, but that may be due in part to institutional buyers who are snapping up properties before individual buyers have a chance to get in on the action.

RealtyTrac reports that in 2012, institutional buying accounted for about 3 percent of all sales. For the first quarter of this year, they accounted for 3.5 percent. In Nevada, where home prices were severely depressed during the housing crisis, institutional sales made up 8 percent of sales during the first quarter. In Arizona, another hard-hit state, first-quarter institutional sales accounted for 5 percent of all sales. Other hot areas of the country include San Francisco and parts of Florida.

Institutional investors have been buying tracts of low-priced, single-family homes to rent or to hold onto until prices rise further. Experts caution individual buyers in some of these popular areas to avoid making hasty decisions. Rising prices may not be sustainable if mortgage rates rise. If investors decide to unload properties at that point, the influx may cause prices to drop again.

The good news for the housing market and the economy is that institutional buyers have purchased many distressed properties that were driving down area home prices and turning off individual buyers. In addition, they've often employed local contractors to renovate them.

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11 Comments
Colorado K
June 14, 2013 at 6:11 pm

Real Estate Giant,

Education isn't everything... as you will soon find out the hard way, I'm afraid. I am highly educated and I am astonished at how arrogant and uninformed you are. The other 5 bloggers you referred to know more than you think.

I am experiencing the fannie mae highest and best at every turn. Fannie mae isn't using credit scores, only the highest and best. I am not looking forward to bailing out these fannie mae home buyers, again.

craig
June 14, 2013 at 5:03 pm

The housing market here in California is starting to look like another greed driven bubble and it looks like the stock arket is going in the same direction. Bank on it another bust will make the first one look like a Sunday School picnic!

Ray
June 14, 2013 at 4:43 pm

The economy is still struggling, just watch the stock market. It goes up people sell and make their money when this happens the poor people have to pay the price of the greed of others. Minimum wage goes up and so does eveything else. Taxes run hard working people in the dirt.the housing market is as bad as wall street. The price of houses went out of control a long time ago, when will people ever see the real cost of what the house actually cost to build and what is it really worth. Government and taxes are a real problem in some areas. A house should not cost hundreds of thousands of dollars, and these people should stay awake at night for ripping people off.

Dave
June 14, 2013 at 12:10 pm

There are no experts.

Real Estate Giant
June 14, 2013 at 10:55 am

More and more I am certain that people will speak about a topic and attempt to sound like an expert, even though they have no idea of what they are talking about.

My advice is to do your own research and do not depend on a blog for information. I read the last 5 comments and none of you have a clue.

I work in real estate at an extremely high level. Before real estate I was a stock broker. I attended business school and graduated with honors, and I am currently attending law school.

ray
June 14, 2013 at 10:50 am

home prices on the rise is a bad thing period, (can you say bubble)
just causes you to be a debt slave.

lars martin
June 14, 2013 at 10:22 am

are you nuts---reagan left recession---country was in best shape in years when he left-----democratic give aways and insisting everyone deserves a home are the problem---even if they can't afford it----i work in bank---see first hand

gov info
June 14, 2013 at 10:16 am

Just a little known fact that fannie mae homes for sale request a higher and best offer on every contract they receive and there are gov funded llc buying up homes competing against us creating alot of false positives in the market

Gay
June 14, 2013 at 9:36 am

No, it is not! Only , to a certain point in value. The another crisis will unfold. Th Local government cannot reply on taxes from property taxes. It will cause another depression juts likethe last GOP depression under Bush and then do not forget recession that reagan caused when he left. Reply on over valued property taxes is a method of self destruction at a certain point. Do you wish to pay workers 50 bucks an hour ? wakeup call ignorant fools

Dr. Den
June 14, 2013 at 9:02 am

When it comes to light, that these properties foreclosed on , were foreclosed on fraudulently; and the NEW owners are not holding a valid mortgage, you are looking at the worse scenario possible. The Robo-Signers have corrupted the entire lending system, and we are going to see a huge drop in home buying because it will be practically impossible to produce the original mortgages, and prove they are honest and correct in stating the true holder of the mortgage.
These 'Bulk' buyers will loose their 'investments', and will try to sell off the homes they bought for anything they can get In order to recoup their losses, and again, the buyer's best beware they don't get stuck with a fraudulent mortgage.
The illusion that the housing market is going up is an illusion caused, most likely by the defunct real estate companies and banks, trying to fool the public so they will blindly go out and 'buy' their products.
Unfortunately, their aren't to many valid mortgages left out there, so buyer's beware. You may think you are paying your mortgage, however, if the mortgage is fraudulent, you are paying who knows who !!!
There are hundreds of thousands of messed up mortgages out there, be sure you see that the SIGNATURES are correct. Go back at least three mortgages on the property, and check them out, or you could lose all the $ you put into it.
Expect the worse real estate market to follow soon. I was fraudulently foreclosed on, lost a $550,000 home because of it; and am in a law suit to try to regain my losses for over nine months now.
Before I buy another house, I will check the mortgages back to the year 2,000 at least. Check the lenders on the mortgages, and the president's signatures and names for accuracy. If anything looks fishy, step away and avoid all the grief that comes with dealing with unscrupulous characters, and lenders.

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