Foreclosure investing is proving to be a gold mine to first-time home buyers and investors. Many investors today are willing to hold on to their properties and wait out for the market to stabilize, a contrast from previous investors who went on reckless borrowing and frenzy buying.
Some investors are even scouring the housing market for troubled residential loans that they think they can fix. Industry experts said that the current low home prices are just too hard to resist for people who have the cash. Additionally, foreclosure investing is also viewed as a way to hasten the recovery of the housing market and economy.
Some investors took a plunge on the foreclosure investment market in Maricopa, Arizona. The desert city saw its population grew to almost 45,000 during the peak of the housing market. The city has a significant number of subprime loans and foreclosure properties.
Many investors were attracted to Maricopa as a spacious alternative to the city of Phoenix. In April, both Phoenix and Maricopa saw their average home prices dropped to an all-time low of $125,000. It increased gradually month after month to finally reach $134,000 last August.
According to industry experts, investors are starting to return to the Phoenix market as they see home sale prices dropping far below the usual market trend. Many of them consider Phoenix?s housing market as a good place to put their money into.
Meanwhile, across the country, property prices increased for three consecutive months in July. This increasing trend encouraged investors to purchase properties. According to the S&P/Case-Shiller Index, property prices in 20 metro areas across the country increased by about 4 percent during the period.
Experts said that majority of the purchasing activity was attributed to first-time homebuyers who are enticed by the $8,000 federal tax credit, low property prices and interest rates. But absentee buyers, such as second-home owners and investors accounted for 41 percent of the total home buying in Phoenix in August.
The home buying activity is so intense that in California and Southwest areas, distressed properties are receiving multiple offers as investors and first-time homebuyers compete for good deals.
One example that foreclosure investing is becoming a trend is the increase in the number of people who attend auctions of foreclosed houses. It used to be that a foreclosure auction would get only five bidders. Now as many as 70 people would join the intense bidding for a foreclosure home.
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