When the home bubble burst, mortgage sales collapsed, both loan origination and into the secondary market. The sleight hand in marketing mortgage backed securities was immediately exposed, challenging the price of homes and real demand. Then the recession ensued, causing demand to dry up and driving down the price of homes in many local markets. A great number of those markets reset back to pre-boom levels, while others recoiled to well below the levels that local economies and incomes could technically support. Most of these markets are off bottom, but have not returned to their “normal” state.
While buying single family rental properties has become the darling investment strategy of Wall Street, it may not always make sense for individual real estate investors — particularly in some markets already picked over by the large institutional investors. But there are still markets where the numbers work for the conservative, individual investor looking to purchase foreclosures and other homes as single family investment properties.
People were on the move in 2012 and apparently the most popular place for them to move to was Pittsburgh, PA., according to the 2012 Top US Growth Cities Report recently released by U-Haul International. The Steel City topped the list of 30 metro areas selected with a 9.04% population growth, based on data collected by U-Haul from over 1.6 million one-way truck rentals during a recent 12 month period.
The cities chosen for the list had more than 5,000 families moving in or out of the area during that time. “Growth cities were then determined by calculating the percentage of inbound moves vs. outbound moves for each area,” said John Taylor, president of U-Haul International, Inc. Other cities in the U-Haul top 10 included:
In Shelby County, there were 1,030 total foreclosures in the first quarter this year, according to real estate information company Chandler Reports. That’s down from 1,252 foreclosures during the same period in 2012 – a drop of 17%. Pull back one year before that, though, and the number of foreclosures had spiked to 1,235 in the first quarter of 2012 compared to 964 in the first quarter of 2011. At this time last year, in other words, the area was in the midst of a 30% gain in foreclosures. Pointing to the recent drop, some local brokers and Realtors say a combination of forces is at work. There’s been a small improvement in the economy, which helps. Banks also are increasingly pursuing workouts, loan modifications and short sales.
A Phoenix home with 95 bids is just one example of a housing market entering a new and unprecedented phase. Experts at Arizona State University School of Business say Phoenix is headed for a major housing shortage.
Long gone are the days when Phoenix was riddled with available, well-built single-family homes in the wake of the 2008 housing market bust.
Five years after the crash, the desert metro is facing lagging home construction, predictions of population growth and rising land prices, according to real estate experts with ASU.
The end result could be a significant housing shortage in the near future, experts contend.