The media keeps publishing their usual fear-mongering, wanting you to believe that as soon as the investors pull out, the real estate market will tank.

Here’s another:

It could be a factor in some of the lower-end markets, but there are plenty of first-timers and low-down-payment buyers being shut out by Big Cash.  They will have their chance if the investors bail, and may have to pay a little more.

How’s the investor action around NSDCC?

A review of 90 NSDCC detached-home sales that closed in the last 30 days in the $600,000 to $800,000 range revealed the following:

  • Based on the mailing address on the tax rolls, 79% of the buyers stated that they live there (21% have their mail sent elsewhere).
  • Of the 90 sales, 72 of them used at least a 20% down payment.
  • Of the 90 sales, 8 were all-cash, and five used at least 50% down.
  • Only five of the 19 non-owner occupiers paid cash.
  • Only two of the 19 NOOs were corporation/LLC names.
  • Six of the 90 were the retail end of a flip.
  • Seven were short-sales, and 2 were REO listings.
  • Eleven looked shady/seedy.
  • Seven included the buzz phrase “won’t last” or similar.

There might have been a handful of flippers or short-term investors in that group, but that sounds fairly normal.

Investor activity is in every market these days, but the vast majority of sales are completed by folks who are living there – and probably in for the long haul.  There are plenty of those still waiting too, so prices may ebb and flow, but if investor activity slows or stops, it will only give more owner-occupiers a chance to get in.

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