- This topic has 23 replies, 12 voices, and was last updated 10 years, 11 months ago by SK in CV.
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April 6, 2013 at 9:13 AM #761055April 6, 2013 at 10:03 AM #761056The-ShovelerParticipant
I think there are at least four (well probably more) types of investment animals out there.
1)Big investment groups (wall-street etc…)
These guys I think typically have about five year holding plan.
(these guys are looking in nicer areas generally, they are the real buyers
(non-investment) competition ).2)Accidental landlords ,
These guys typically have a number (somewhere just above what they paid)3)Flippers (just out for a quick buck).
4)Long term cash flow investors (retiree’s etc…)
These guys usually don’t buy the homes most buyers are really looking to buy anyway (they might rent them however until they are ready)
Condo’s, smallish three/two’s in just OK areas etc…
Nice homes in nice areas usually don’t cash flow very well.In short, I think most the real frenzied areas are not long term cash flow investors at this point
Flippers and home owners fighting over what’s available until the builders start to build again.It takes 6 months to 2 years to get a sizable project started, and the process was almost completely shut down during the crash.
Very very hard to get a sizable project approved in SD these days as well.
April 6, 2013 at 12:21 PM #761059equalizerParticipantSince prices are going up, people looking to move to smaller place, out of town or sell second home will wait until prices appreciation slows down.
Seems like SD market was slow between 1990-1996, this time faster recovery?
Cause really out of good land, population increase?April 6, 2013 at 2:14 PM #761063bearishgurlParticipant[quote=equalizer]Since prices are going up, people looking to move to smaller place, out of town or sell second home will wait until prices appreciation slows down.
Seems like SD market was slow between 1990-1996, this time faster recovery?
Cause really out of good land, population increase?[/quote]Very perceptive post, equalizer. I agree with all of it. I don’t see imminent retirees willing to leave anything on the table if they can possibly help it.
April 6, 2013 at 2:26 PM #761064SD RealtorParticipantWrong about investors on most all of he counts. The frenzied behavior we are seeing on SFR homes over 500 is limited in great part to owner occupants, not 100% but pretty close. The investors at this point are sticking to smaller condos or flips. Once more, it is simply a lack of inventory. Why do many of these buyers remain in the frenzy? Many of them believe that prices will continue to move and/or interest rates will rise and that prices will not be adversely affected. Conversely, some of them simply do not want to wait, they waited through 09, 10, 11, 12 and realized they screwed up. I am not saying they should or should not buy now, I am just saying what goes on in many buyers minds.
April 6, 2013 at 6:52 PM #761065joecParticipant[quote=SD Realtor]Wrong about investors on most all of he counts. The frenzied behavior we are seeing on SFR homes over 500 is limited in great part to owner occupants, not 100% but pretty close. The investors at this point are sticking to smaller condos or flips. Once more, it is simply a lack of inventory. Why do many of these buyers remain in the frenzy? Many of them believe that prices will continue to move and/or interest rates will rise and that prices will not be adversely affected. Conversely, some of them simply do not want to wait, they waited through 09, 10, 11, 12 and realized they screwed up. I am not saying they should or should not buy now, I am just saying what goes on in many buyers minds.[/quote]
I agree with SDR that supply is really low now. Downside for people trying to time the bottom is that when you buy to live in it, you don’t need it to be the absolute bottom. All those people who skipped buying from 09-12 did miss out and probably do feel like they screwed up so they maybe under more pressure to rush in now (sorta like a person who hit 30 and wants to get married, etc and feel they have to “settle” more).
We can all say you can wait another couple years, but who knows how long the fed will keep keeping rates low. Maybe it’ll be 10 years, 5, 2 who knows. At that time, you’re 10, 5, and 2 years older after missing out from 09 (another 4 years) and not “enjoying” or “wanting” the life you want.
We all know rents have been going up 5-10% the past few years and landlords have all the control now. Renters hate this and feel they have no control paying tons for a crappy place putting more pressure to buy. I know we HATED our rental (area, neighbors, parking, safety, everything).
We bought in 09 and a house down the street rents for more than what my mortgage is now with rates so low. Even if housing goes down, unless rents go down with it, any recent (09-11?) buyer shouldn’t be stressed enough to be forced to cut prices or sell so I don’t think you’d get any recent buyers willing to cut prices much if rents are more. Mortgages were hard too so all these folks put money down so aren’t as likely to default.
April 6, 2013 at 7:03 PM #761066SK in CVParticipant[quote=joec]
We all know rents have been going up 5-10% the past few years… [/quote]No, they haven’t.
April 7, 2013 at 3:32 AM #761067joecParticipant[quote=SK in CV][quote=joec]
We all know rents have been going up 5-10% the past few years… [/quote]No, they haven’t.[/quote]
You’re saying rents aren’t up 5-10% since 2008/09? I am not saying it is up 5-10% EVERY year, but definitely up that much the past few years to make the rent/own equation not that obvious for most folks and why people are rushing in since their rents are going up, mortgage rates are lower, etc…
April 7, 2013 at 6:58 AM #761068SK in CVParticipant[quote=joec][quote=SK in CV][quote=joec]
We all know rents have been going up 5-10% the past few years… [/quote]No, they haven’t.[/quote]
You’re saying rents aren’t up 5-10% since 2008/09? I am not saying it is up 5-10% EVERY year, but definitely up that much the past few years to make the rent/own equation not that obvious for most folks and why people are rushing in since their rents are going up, mortgage rates are lower, etc…[/quote]
5-10% total over 4 or 5 years? Yes. Rents were pretty much flat in most parts of the county in 2009 and 10. They rose in 2011 and 12. It’s possible that rents overall are 10% higher now than 2008, but probably not much more than that. I don’t think we’ve seen a 10% increase in rental rates in any one year in a couple decades.
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