gn, so you mean high forclosure activity artificially suppresses the rental supply in MM now? You tend to assume that MM is a big rental market. I am not sure if MM is a big rental market or area in san diego but when you look at the back issues of san diego readers and even in craigslist, MM always and most of the time does not have a lot of rental properties to rent, unlike La Jolla and UTC. I have been keeping track of the readers since 2000 because I kept looking for rental since 1998 but I didn’t see a lot of listings in MM. That tells me that if MM is a big rental market, then it must have its advantages to attract renters so that listings are not many. Or it may not be a big rental market. Next, you assume that people who buy REOs are investors. How can you tell and why. I am living in a house that I purchased as an REO property. In contrast, I think most of the REO buyers will live in the house. They buy now because they were suppressed back then by high price so that they could not afford to buy and they now saved enough and the price has gone down so that they buy. At least that is my case. I do not think that there are as many investors now as there were 2 years ago. It is because first, a lot of the flippers are gone because of the bust. Second, as formerSD mentioned, they need to put more downpayment and the interest rate would be higher. Third, lenders are more stringent these days to loan money to investors.
