Investors – Nia Knowles:Westside West End Westview Atlanta REALTOR

Housing Inventory Decreases

The number of homes for sale declined 2.4 percent in November in the metropolitan areas covered by ZipRealty Inc. In the last 25 years, the decline in November has averaged 1.8 percent.

The data doesn’t include New York, but Miller Samuel Inc., an appraisal firm, reports that inventory was down 7.1 percent from the end of October and down 18 percent compared to November 2008.

October was the first month since January to show a rise in bank-owned homes. The number of bank-owned properties declined over the summer because of efforts to prevent foreclosures. As time runs out for many families, the number of foreclosures is increasing.

As of the end of October, banks and mortgage investors had 639,000 foreclosed homes for sale across the U.S., Barclays Capital estimates. “We expect a rebound in distressed inventory in the coming months,” says Glenn Boyd, a senior analyst at Barclays.

Source: The Wall Street Journal, James R. Hagerty (12/09/2009)

Private Investors Dominate Foreclosure Market

Cities and municipalities are having trouble spending the money allotted by the controversial Neighborhood Stabilization Program, which was passed by Congress last year to acquire houses in blighted neighborhoods.

The goal was to buy vacant properties at 1 percent less than appraised value, rehab them, and either sell or rent the homes to low-income residents.

The stumbling block is that the houses are being purchased by private investors and more affluent home buyers at cheap prices.

Some people don’t see that as a problem. “If the private market is coming back and buying houses and crowding the government out, that’s not a bad thing,” said Joseph Pigg, senior counsel at the American Bankers Association.

In some areas, the nonprofit National Community Stabilization Trust is working with banks to give government access to foreclosed homes before they are put on the market. But that may be too little, too late. “It’s very unclear when the dust settles how much real change in neighborhood stability and quality of life we’ll see,” said housing expert Alan Mallach of the Brookings Institution.

Source: CNNMoney.com, Tami Luhby

Investors Drive Foreclose Prices Up

Home shoppers in parts of the country with lots of foreclosures are finding it increasingly difficult to buy. Investors are bidding up prices thousands above the original asking price.

Federal legislation slowing the number of foreclosures is adding to the problem by reducing the number of homes on the market. For instance, in Las Vegas, one of the areas where the bidding problem is greatest, home inventories are down 10 percent since March, according to the Las Vegas Association of REALTORS®.

When a bidding war erupts, the problem is particularly difficult for traditional buyers because investors are usually cash purchasers. They can bid up a property without concern whether the appraisal will prevent them from getting a loan.

Experts say the problem is not unlike the situation at the height of the housing bubble. “This market is about as abnormal as the hypermarket that we came out of a few years ago,” says Jay Butler, director of the Realty Studies program at Arizona State University.

Source: The Associated Press, Jonathan J. Cooper

10 Cities Boasting Mini Sales Booms

Some cities that were hardest hit by the real downturn are experiencing mini sales booms.Las Vegas real estate properties are down 28 percent in price, but sales of homes are up 15 percent.

Motivated buyers accounted for 64 percent of Las Vegas sales in October, says Radar Logic, a derivatives firm. That’s the highest rate in the country.

“There’s a pretty active housing market, it’s simply at a lower-priced inventory,” says Michael Feder, chief executive of Radar Logic. “And there are now bidding wars taking place over homes in foreclosure.”

Phoenix and San Diego are reporting similar experiences.

“We’re clearing out the bad news,” says Kiva Patten, a director at Merrill Lynch specializing in housing derivatives.

“By the end of 2010 – that’s where we’re calling the bottom in the forward market. You’re going to get a small price appreciation in 2011,” says Patten. “It’s not like the turn is 10 percent per year, it’ll be something like 3 percent or 4 percent.”

Here are the cities where experts say it makes the most sense to buy now.