IMHO, a lot of this “all cash” investing we’ve seen over the past 2-3 years is money from overseas investors. I think they’ve heard all about the “foreclosure crisis” and assume that there are tons of deals here — not realizing that the foreclosures are just the unwinding of sales and prices that wouldn’t have happened in the first place, if not for the *credit bubble.* The foreclosure are NOT bringing prices “below their fundamental value,” prices are simply coming down to where they belonged in the first place. These investors are not getting “deals,” even if they are foreclosures.
As the article points out, many/most of the areas that were first hit (and lost all the bubble air because the Fed/govt didn’t step in to prop things up until the price declines moved into the better areas) are not good neighborhoods, and not likely to yield good tenants who pay on time and keep everything nice and tidy. I think some of these “investors” are going to be surprised at how things pan out over the years. Real estate does not “always go up” in the U.S., contrary to what the used house salespeople might say, and being a landlord can be an absolute, money-losing nightmare.
