Friday
Mar292013

Housing once again an investment

Greetings
In the regular lending business for houses, mortgages just are what they used to be.

According to a WSJ article, March 1 2013 entitled "Cash Course in Housing Fundamentals", overall home sales are back to where they were in 2007 (around 4.5M units sold annually).

However, especially in the hard-hit markets like FL, mortgages now make us a much smaller portion of the home sales.  In 2007, 15% of the sales were cash (implying strong investor interest).  In 2012, DataQuick showed from 55 urban markets, that the cash purchase figure jumped to 36%.  That's more than DOUBLE the cash investment for home buying now verses 5 years ago.

The Government data shows a similar trend-- 4Q 2012 was $123B in mortgages vs. 4Q 2007 at $226B.

Although some of this cash comes from folks who live in their new homes, investors are large share of this new trend (even Blackstone Group, the largest asset manager in the world at over $3.2Trillion under management is buying houses for rentals).

Low rates ironically have once again turned housing into an investment. 

Until Next time,
Tobias J Preston, President.


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