Real Estate Investors Shift Focus

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Price increases in many once “hot” investment markets are prompting real estate investors to shift their focus elsewhere as they seek to buy up more distressed homes to turn into money-making rentals.

For example, Phoenix was largely targeted by investors, but it has recently seen large home price gains, up 24 percent year-over-year in November, which has caused many investors to start to move on to other markets. In August, the percentage of homes purchased by investors in Phoenix was nearly 36 percent but by November that percentage fell to 38 percent.

“The Phoenix-like phenomenon has migrated to other markets,” says Sam Khater, CoreLogic economist, told USA Today.

Investors are changing their focus to Southeastern cities like Atlanta and Tampa, Fla., USA Today reports.

Investors “are a significant force in the market right now,” says Mike Prewett, president of Southern REO Associates, Atlanta. He estimates that investors are snapping up 40 percent of the foreclosed home inventory in the Atlanta area and multiple offers are common among nearly every foreclosure sale. Prewett says that many of the foreclosure sales will draw 10 or more multiple offers.

Investors are expected to stay a powerful force in real estate in 2013. According to JPMorgan Chase research, institutional investors have $10 billion to spend on the single-family rental market this year. Investors reportedly are mostly targeting distressed homes in cities that saw the biggest hits to home prices from the 2006 downturn. The properties they most tend to seek: Three bedrooms, two baths in the $100,000 to $125,000 range.

They plan to then rent these homes out for $1,000 a month, housing analysts say.

 

Source: “As Prices Rise, Rental Home Investors Seek New Markets,” USA Today Jan. 21, 2013
Read More: First-time Home Buyers Face Greater Competition
via Real Estate Investors Shift Focus | Realtor Magazine.

Is the Housing Market the Missing Link to a Better Job Market?

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The Key“A housing revival is key to any optimism about the broader economy and jobs,” Mark Zandi, chief economist at Moody’s Analytics, writes for The Washington Post.

Zandi notes that in every recovery since World War II a strengthening housing market has powered economic growth.

“Now that housing is finally getting its bearings, it will turn from an economic headwind into a tailwind and become a significant source of jobs,” Zandi notes. “There will be more construction jobs, construction-related manufacturing jobs, transportation and distribution jobs, retailing jobs, financial services jobs and a range of service jobs from cable hookups to landscaping. A better housing market is the principal missing link to a better job market.”

Zandi notes the “housing renaissance” already taking shape: Housing is at record highs for affordability, due to falling home prices the last few years and record low mortgage rates. Plus, rents are rising, leading more renters to realize that home ownership might make more financial sense than continuing to rent. Also, a growth in household formation is a promising sign the housing market will continue to grow.

“A housing renaissance has begun,” Zandi says. “Driving this optimism is one certainty: Owning a home has never been as attractive.”

Source: “Housing’s Renaissance Could Lead to an Economic Recovery,” The Washington Post (Jan. 4, 2012)
via Is the Housing Market the Missing Link to a Better Job Market? | Realtor Magazine.

New homeowner protections go into effect January 1, 2013

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Helpful TipsThe New Year will bring more protections to California homeowners, mainly those who are trying to save their properties from being repossessed.

The Homeowner Bill of Rights, signed by the governor this year, is a set of new laws that puts the onus on banks to help consumers through the foreclosure process. They go into effect Jan. 1. The legislation, lauded by housing advocates and heavily criticized by the lending industry, forces banks to:

• Stop dual tracking, the process of starting the foreclosure process while a loan modification has been submitted or being reviewed by the bank. Borrowers in the past have lost their homes to foreclosure as a result of this situation. Under the new law, banks must give loan-modification applicants a response before starting the foreclosure process. Banks also will have to inform consumers who don’t apply for a loan modification that they have the right to do so.

• Stop robo-signing, the process of approving foreclosure documents without proper review.

• Assign one point of contact to borrowers who are trying for a loan modification.

One of the laws also allows borrowers to sue loan servicers for violating any foreclosure laws.

Read the rest of the story, click here.

via New homeowner protections go into effect Jan. 1 | UTSanDiego.com.