Market Update: Home Price Surge to Moderate

posted on June 14th, 2013 | filed under: Buying Strategies, Cardiff, Carlsbad, Del Mar, Encinitas, Loving the Lifestyle, NoCo SD Market Conditions, Rancho Santa Fe, Solana Beach, Successful Selling

Last month we saw that the decline in the number of distressed home sales, bank-owned and short sales, has been the main driver in the recent surge of prices.

What we didn’t explain was why there were so few distressed property sales.

When the market was reaching its nadir in 2009, institutional investors poured in with big money and purchased bulk foreclosed properties from the bank, which they then turned around and rented.

That’s why the “shadow inventory” every pundit was trumpeting a few years ago never appeared.

Well, guess what? Those same investors are now fleeing the market.

According to Businessweek’s interview with Bruce Rose, hedge fund manager and one of the first to put money into buying bank-owned property, “we just don’t see the returns there that are adequate to incentivize us to continue to invest.”

What does that mean for the rest of us? First, we’ll be seeing more bank-owned properties come to market. Second, price increases should moderate.

To read the full report on-line, go to:

Trends 6.14.13

posted by Jeff DeChamplain

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Jeff DeChamplain