Investors are Back in The Home Buying Game

Home sales are on the rise again and investor groups are the main reason as they are buying up the majority of the foreclosed houses from banks.

Cash speaks in this market and, in many cases, investors are prevailing over first-time home buyers and other owner-occupants because they bring cash to the table.

In Phoenix, 38 percent of April sales of single-family homes were all-cash deals.  Mark Allen, a former division president at D.R. Horton, the nation’s largest home builder, is working with Gorilla Capital, which specializes in foreclosures, to buy dozens of properties at courthouse auctions.

Barclays Capital estimates that banks and loan investors owned 765,500 foreclosed homes as of April 1, up from 629,100 last year. By 2010, Barclays expects them to have acquired about 1.3 million homes. When the market improves, these owners will try to sell.


Source: The Wall Street Journal, Michael Corkery (05/20/2009)