Salient to Investors:

RealtyTrac reported:

  • Home purchases by institutional buyers reached a record high of 14 percent of sales in September and all-cash buyers accounted for 49 percent of sales – 10 percent nationwide were properties repossessed in foreclosures, with Las Vegas at 21 percent, Riverside and San Bernardino at 20 percent, Cleveland at 19 percent and Phoenix at 18 percent.
  • Institutional investors accounted for 29 percent of all home purchases in Atlanta, followed by Las Vegas at 27 percent, St. Louis at 25 percent, Jacksonville at 23 percent and Charlotte at 17 percent.
  • The median price of a property in foreclosure or seized by a bank was $112,000 versus the $189,000 median price of a non-distressed property.

Real estate values nationally are 21 percent below their peak.

The median monthly rent nationally was at an all-time high of $735 in Q2, while the rental vacancy rate was at 8.2 percent, the lowest since Q1, 2001.

The S&P/Case-Shiller index of property values in 20 cities increased 12.4 percent in July from a year earlier, the biggest advance since February 2006. Las Vegas increased 27.5 percent and Atlanta increased 18.5 percent.

Michael Hanson at Bank of America said investors and traditional buyers are buying cheap homes before prices go higher, but investors have the advantage of paying cash.

Blackstone and American Homes 4 Rent have together bought 60,000 homes to benefit from low prices and rental demand from millions of former home owners who have lost properties through foreclosures.

Haendel St. Juste at Morgan Stanley said the homeownership rate, which declined to 65 percent in half1 from a peak of 69.2 percent in June 2004, is expected to stabilize around 63 percent, adding more than 2 million households to the rental population.

Daren Blomquist at RealtyTrac said the pendulum is swinging too far from everyone wanting to buy a home in the run-up to the mortgage crisis to qualified people stuck with being renters.

Keith Gumbinger at sees tremendous pressure on inventory in areas being dominated by investors – all the homes have been converted into rentals.

Freddie Mac said the average 30-year fixed rate was 4.28 percent last week versus a two-year high of 4.58 percent in mid-October.

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