Remember when "investor" was a four-letter word? Not anymore. Now, investors are all but saving the housing market.
According to Housing Intelligence, the research division of the Hanley-Wood publishing company, the investor share of housing sales is higher now than in 2005, when short-term flippers pumped up the demand for all types of homes. "And we can be thankful for that as it is serving to clear much of the distress and oversupply" out of the market, says HI's Jonathan Dienhart.
According to HI, 40% of all bank REO sales so far in 2011 were to buyers who do not live in the properties full time. In addition, 28% of all resales were to these investors, as were 13% of all new home sales. "Just think of how bad the year would have been without this activity!" said Dienhart.
The markets that have proved to be most attractive to investors this year are those which had significant distress (Michigan), offer attractive second home destinations (Hawaii and Florida), or were large urban areas with a lot of condominiums at relatively low prices (New York).
