Investors Return to the Phoenix Market- Thanks to Foreclosures
Many foreclosed homes are bought by investors who can pay cash, market watchers say. That means fewer homes are going to buyers who plan to live there and hang onto the house for a while. Owner-occupied homes ultimately help an area's recovery. The Valley's housing market is seeing the flipside of the investor cycle now. In 2004, investors cashing in on loose lending guidelines, the Valley's growth and relatively affordable housing started the buying frenzy that led to the wild run-up in home prices. Many of those investors, who didn't sell before prices dropped, ended up walking away from the homes and starting the Valley's foreclosure problem.
Aimee Jackson has been trying to buy a foreclosure home in the West Valley for the past six months, but the pharmaceutical sales representative keeps getting beat out by investors.
"I am pre-approved for a loan, and that's not easy now," said Jackson, who has been making offers on newer homes in Surprise, Peoria and Buckeye. "But lenders all seem to be going for the cash offers from investors. It seems unfair."
Jackson is going to keep looking at foreclosure resales because she doesn't think prices are going to go up on those properties anytime soon. She also doesn't think regular homeowners are pricing their houses low enough to compete with foreclosure properties.
Bettina Franco, a real-estate agent with Phoenix's HomeSmart, said lenders are trying to resell so many foreclosures now that homeowners trying to sell have given up trying to compete with them.
There is concern among real-estate analysts that investors will again hurt the housing market.
"In some areas of the Valley, we are starting to see the bottom for prices," she said. "But we need to get rid of all the foreclosures first and watch what investors are doing."
by Catherine Reagor - Oct. 26, 2008 12:00 AM
The Arizona Republic