With the U.S. housing market recovery in full swing, reports differ as to how much of the current buying activity is investor-driven. Today The Wall Street Journal offers some hard data:
“Currently, cash buyers—largely investors—make up about 32% of sales nationally, according to the National Association of Realtors. In Southern California, a favorite target for investors, absentee buyers accounted for 31.4% of purchases last month, up from an average of less than 17% between 2000 and 2010, according to DataQuick MDA, a real-estate research firm. While some firms have focused only on Sunbelt markets with newer housing stock, others are branching out. American Residential Properties Inc., which began amassing hundreds of homes in Phoenix four years ago, earlier this month bought 93 homes in Chicago’s southern suburbs, bringing its total there to around 300.”

No doubt speculative excitement in many U.S. housing markets “helped set a floor”. Now, with house prices climbing, that excitement is expected to spill over into consumer spending since “more American homeowners will be able to use their properties as cash machines again.” As for any questions as to how those types of cash advances work, the tapped out Canadian consumer is well-versed on the HELOC model. (Give us a call?)

Some of Mr. Pintar’s investors have him steer clear of certain homes, such as those with swimming pools, which require extra maintenance that isn’t covered by higher rent. He focuses on neighborhoods that have low crime and good schools and are near freeways and shopping areas. Mr. Pintar said he has no plans to slow down. In the past four months, the professional landlord hired 75 new employees. He also looked into buying his own commercial office building for his growing operation. “We figured why pay rent to someone if you don’t have to?” – WSJ