By Sunny Isles Real Estate Expert on May 26th, 2012
Miami real estate investors
have been sweeping up the foreclosure market in an effort to see record gains once the housing market rebounds. The bargains found in the foreclosure market are unparalleled, and real estate investors have been able to make significant gains by purchasing these properties and harvesting them for future sale. The propensity of investors to purchase REOs has been correlated to something of a ‘gold rush’ in the housing market, as foreclosures continue leaping off the market as hungry investors continue to add to their portfolio.
Investors seem to be eyeing these properties with the same kind of zest that risk-takers in California did during the Gold Rush of 1848 in hopes of getting rich through the resale of properties over the long haul. While the real estate market has been exceedingly volatile over the past few years and has shown a remarkably low price threshold, investors have been scooping up foreclosed condos as well as foreclosed homes very quickly in preparation for the eventual recovery that appears to be in progress right now.
Some investors have been buying properties in bulk at the lowest possible price in an anticipation of a housing boom in the future. There are many of these homes on the market, many offered through government-sponsored enterprises like Fannie Mae. With banks owning more than 600,000 single family homes, and GSE’s owning at least 200,000, the real estate investment market has been ripe for the picking in the past few years. Investors that want to tap into the modern day gold rush need only to look at foreclosed properties to get a piece of what will invariably be a very profitable market in the future.
These government agencies have also taken the initiative to offer foreclosure-to-rental programs to entice investors to bid on forecloses properties, but many real estate agencies have argued that this step is unnecessary since investors have more than enough motivation to purchase these properties without an additional program. Since investors have purchased a significant percentage of the foreclosed homes that have been available, real estate organizations like the National Association of Realtors have contended that such intervention is unnecessary. The enormous stockpile of REO properties held by government sponsored enterprises may indeed mirror the gold rush of 1848 because the investors are showing the same characteristics as were present during that time. This housing market is not only ideal for investors but also for homebuyers looking for low interest rates and home prices.