Why Real Estate Investors Have the Edge in Housing Market
Prospective homebuyers are entering some markets today to find it rife with competition and the pickings slim. While many put off home purchases during the financial crisis, Wall Street investors dove right in and snapped up all the good buys while they were cheap. This was especially prevalent in areas where housing prices bottomed out during the recession. And now, with interest rates historically low and the economic recovery under way, average consumers want in -- but they're running into fierce competition over what's left to choose from.
A recent discussion on HuffPost Live -- shown in the video above -- looked at why real estate investors make much more attractive buyers than others in the housing market. Said Matthew Ong, a retail analyst at Nerd Wallet: They bid in cash, in full and higher than the asking price. Investors also have the funds to give homes much-needed repairs. But instead of selling those properties they rent them out, altering the social fabric of the neighborhoods as people begin to move in and out more frequently.
"The problem here is that investors buy when something is cheap, whereas consumers buy when they're ready," Ong said.
But waiting for buyers to be ready is not how the market works, so average consumers might need to be prepared for a long, hard search.
See more news about homebuying:
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