How Significant are Investor Buyers in Southern California? Where do they focus?

Who are the people buying Homes?

Investors continued to dominate the resale housing market here in Southern California. As recently as July 2012; they comprised 59% of buyers.

DataQuick places investors into two categories;

Cash buyers who comprised 32% of all buyers in July, and

Absentee buyers who recorded a loan but have the mortgage payments sent to another address. These buyers are largely small investors but also include second home buyers. They comprised 27% of all buyers.

In July 2012, Conventional buyers comprised a minority of buyers, 41% of total home purchases.

While investors comprise the bulk of buyers, they are not driving the top of the market. Absentee buyers purchased homes at a median price of $230,000; Cash buyers a median of $235,000.

What are Cash buyers doing with their investments? A hint may be in the DataQuick statistics; 21% of homes sold in July were foreclosure resales that had been purchased in the prior 12-months. This number reached a high of 56.7% in February 2009.

Short sales, which comprised 18.7% of purchases, are another popular "spin" for investors. Others are placing homes into the rental pool.

Where is the inventory of distressed homes so popular with investors seeking homes in the low $200 thousands?

The vast majority of the distressed  home inventory are found in three southland counties, Los Angeles, Riverside and San Bernardino.

Bank owned properties have gone through the foreclosure process and are either in bank ownership or avalible for sale as a REO home.

Trustee Sales: The green bands are homes that are nearing the end of the foreclosure process and have a date set for a trustee sale (an auction where cash buyers are the purchasers).

Preforeclosure: The homes in preforeclosure are homeowners behind on their mortgages by atleast three months and have received a notice of default. Some of these will bring their mortgages current, others will be successful in a mortgage modification, some will choose to short sale their home and some will allow the home to proceed to a trustee sale.