Their attention is on other factors dogging the economy, such as a labor shortage, decades-high inflation, supply chain disruptions and of course the ongoing pandemic, which has been at least partly the cause of all of those problems. Most economists and investors aren’t focused on the housing market right now. It produced massive, prolonged unemployment and the greatest destruction of household wealth in the nation’s history. That led to the Great Recession, the biggest body blow that the US economy has suffered since the Great Depression.
That’s the current state of America’s housing market, but it could also describe the US housing bubble that inflated from 2004 through early 2007, before prices crashed and wreaked havoc on the economy and the global financial system. They’re being fueled by historically low interest rates - but also investors and economists’ belief that the housing market has a unique ability to support runaway prices. Jonathan Lansner is the business columnist for the Southern California News Group.Housing prices are surging to new records with no end in sight. I’m sure some will see these investor trends as a sign of California’s economic weakness, but I’ll start the new year with one thought about risk: Thankfully, we’re not Phoenix! On a scale of zero bubbles (no bubble here) to five bubbles (five-alarm warning) … THREE BUBBLES! I know some Californians pine for Phoenix, but its real estate is kind of insane …Ĭash buyers: 43% of sales, No. Top for flipper’s share? Phoenix and Ogden, Utah, at 9.5% Salt Lake City and Salisbury, Md., 9.3%.
77 of the metros - with purchases up 30% in a year. They’ll buy and flip as long as it’s profitable … Tops for institutional shares? Atlanta at 19.54% Phoenix at 19.5% Charlotte at 19.3% and Jacksonville at 19.1%.įinally, the flippers (194 metros ranked). Big jumps in activity come from very low levels in 2020 … Next, the big institutional buyers (175 metros ranked) are relatively new players, so there are no track records to handicap. Top spots for cash buyers’ share? Columbus, Ga., at 75% Atlanta, at 69% Macon, Ga., 59% and Youngstown, Ohio, at 57%. Los Angeles-Orange County: Cash buyers were 28.7% of sales, No. Nationwide, their 7.3% share of sales was up 208%. Institutional buyers: California’s 6.3% share ranked 18th. Nationwide, these buyers snared 34% of sales, up 59%. the nation, investors represent a fast-growing but below-average slice of homebuying activity …Ĭash buyers: In California, they nabbed 28.5% of sales, 21st among the states. The fickleness of investors makes this group one to watch carefully. Source: My trusty spreadsheet reviewed Attom’s data on three key slices of investors purchases in 2021’s third quarter: cash buyers (folks seeking a place to live usually don’t make mortgage-free deals), institutional buyers (big, well-financed firms acquiring homes to flip or rent) and flippers (buyers who sell within a year). “ Bubble Watch” digs into trends that may indicate economic and/or housing market troubles ahead.īuzz: Homebuying investor activity in California might be elevated, but it’s still tame compared with hot U.S.
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