Investor power leads to decrease in housing prices
Posted on Friday, January 27, 2012 at 9:25:45 AM
Investors are increasingly taking charge of the housing market. Cash buyers are claiming almost one third of all home sales in December 2011, according to the latest Campbell/Inside Mortgage Finance HousingPulse Tracking survey.
Investors accounted for 22.8 percent of home purchases in December 2011 - up from 22.2 percent the previous month, reported the source. Many of these home sales are for properties that have been foreclosed on.
“Investors usually offer 10 to 20 percent below list up to a price of $250K. First time homebuyers are offering close to list price as are current homeowners. Investors want two to four weeks to close...Financing buyers end up with six to eight weeks plus to close,” reports an Arizona real estate agent who participated in the survey.
The offer of cash and shorter closing time by investors acts as a tempting offer to sellers. However, sellers may wish to keep in mind that while closing takes longer for traditional homebuyers, they traditionally offer more due to market standards and residential financing options.