Are Investors Throwing Off Housing Industry Recovery?

Foreclosures have been dropping steadily, and the housing market appears to be recovering. But investors are suddenly jumping ship; what does this mean — to homeowners, the housing market, and the economy?

What The Housing Market Looks Like Now

In the latest report from S&P/Case-Shiller (a leading industry index) the readings showed that home prices in June were up, not only nationally, but across the top twenty metro areas. S&P’s David Blitzer says, “I think this is a very clear sign we’ve turned around.”

Although the summer months are usually stronger in the housing sector, the report shows not only month-over-month growth, but year-over-year growth as well. Partly responsible for that growth has been the supply of homes. Inventory in July (the number of homes on the market) was down 24% from a year ago. Investor activity — at a 2-year peak in May 2012 at 25.3% — dropped all the way to 21.9% in July.

What Does the Change in Investor Activity Mean?

Some people refer to investors as ‘canaries in a coal mine,’ whose hesitance can be taken as an early warning sign, especially in these cautious days. But in a recent HousingPulse survey of realtors across the country, they see no cause for alarm. An agent in California says, “Investors are dropping out due to the increase in prices.”

With foreclosures down 14% from last year as banks explore other options with their loanees, perhaps the answer is merely that investors can no longer get the bargain basement prices they’d become used to.

Still, cautious analysts assert that we don’t have enough information to know for sure. Since the housing crash was so unprecedented, there’s no way to say for sure what the recovery will look like, and whether customary indicators will be of any use. Time is the only way to tell what this slump in investor activity will mean for the housing sector.

If you’re looking to buy or sell a home, talk to the experts. Call us today at 703-485-HOME or by email [email protected].

About Ashley Leigh

Ashley Leigh is one of the most successful real estate agents in the United States and founder of Linton Hall, Realtors®, the premier real estate company in Prince William County, Virginia. In his book Billion Dollar Agents, Steve Kantor featured Ashley for individually producing well over $2 Billion in career sales selling thousands of homes. Ashley Leigh's innovative marketing programs have been have been written about in Fortune magazine. Additionally, Ashley has been profiled in RISMedia’s Real Estate Magazine and Power Team Report and has been recognized by REALTOR Magazine as one of the Top Sales Agents in the U.S. The Wall Street Journal ranked Ashley as one of America’s Top 20 Realtors in the Nation for his sales production for several years. Connect with Ashley on Google+

lintonhallrealtors 5 out of 5 based on 1 ratings.