Investors with cash are buying houses
Posted by Amy Koch: May 10 2010
Helping Canadians buy Scottsdale Houses
By Stephanie Armour, USA TODAY
More home buyers are snapping up properties with cash, a trend driven in large part by investors returning to the market after four years of falling prices around the country.
The share of home sales involving all-cash transactions was 26% in January, up from 18% a year earlier, according to the National Association of Realtors. The figures come from a survey of members about their most recent transactions. Many home buyers also are paying cash, but investors are largely using cash so they can avoid paying interest charges on loans and get a larger return on their investment.
Other NAR data also show a pickup in investment activity.
Home purchases made by buyers identified as investors climbed to 17% in January, up from 15% in December and 12% in November.
“We bottomed out in 2008, and in late 2009, prices stabilized and investors have returned,” says Mark Fleming, chief economist at First American CoreLogic. “It’s a different type of investor going after foreclosed properties and expecting to hold on for longer time frames.”
Leonard Baron, a real estate professor at San Diego State University, has bought three homes with cash in the San Diego area in the past eight months, ranging in price from $100,000 to $130,000. He rents the properties. Baron says now is an ideal time to make such purchases. “It’s because prices have dropped so much and rents really haven’t,” he says. “The deals were unbelievable.”
