Housing Market Boom? LOS ANGELES (CBSLA.com) Local Home Buyers Compete With Foreign Cash
Foreign investors credited for driving the real estate market here in Southern California could be making it more difficult for local buyers – at least in the short term, according to analysts.
KNX 1070′s Bob Brill reports while prices are on the rise, experts are predicting the recent trend of all-cash sales will ultimately benefit buyers across the spectrum.
As foreclosures plunge statewide – down as much as 60 percent in January from December – median housing prices for the six-county Southland region jumped by nearly 25 percent in the same month to $321,000, according to DataQuik.
One Rancho Cucamonga man told the Los Angeles Times he has placed over offers on various properties, but has lost each time to cash buyers who can avoid the red tape of a traditional down payment and financing.
“[We] put in offers on a bunch of homes that we liked right from the get-go, put an offer in and then our offer gets rejected because they select an all-cash offer,” said Bill Sepe, who added that offers have typically come in around $25,000 or higher than the sales price just so the buyer can “get in and rent it out.”
Jeff Lazerson, president of MortgageGrader.com, said the trend shows what the world thinks of U.S. real estate.
“Chinese, Taiwanese investors, and some money coming in from the Middle East,” said Lazerson. “It’s really amazing how much is gravitating this way because they view the U.S. real estate market as just being very, very safe.”
The regions that were hit hardest by the housing downturn such as Riverside County and much of the Inland Empire could soon see a revitalized housing market amid a combination of cheap homes, investor cash and shrinking inventory, according to analysts.
Lazerson said he expects the foreign buying spree to eventually make it easier for new buyers to enter the market.
“Think about the low tide and the high tide, as property values in general go up,” Lazerson said. “There’s more people that can actually sell their property and move up or move across.”