Digging for Investment Deals Gets Tough as Housing Inventory Shrinks

NAR reports housing inventory is down over 22% nationwide, with some areas seeing a reduction of over 50% as investors desperately hunt down the few deals available.

Investors across the country are increasingly complaining that auctions no longer offer bargains. REOs are scooped up too fast and at prices beyond which make sense for investing, all the while major lenders find new ways to facilitate non-performing mortgage sales. So, where are all the good deals at?

On a nationwide level housing supply hit its desired equilibrium with demand at 6.3 months, as of March 2012. However, with April posting a buoyant month, LA, San Diego, Denver, Phoenix, San Francisco, and Silicon Valley are among the hot spots now sitting on less than three months’ supply. These areas are seeing homes fly off the market in an average of just 49, with the average of 30 other metro areas barely topping 90 days.

There is only room and profit for investors who are quick on their feet or who are positioned way ahead of the competition.

Regular homeowners don’t want to sell their homes. Some delusional owners are still waiting for Obama’s personal bailout in their mailboxes, while others aren’t interested in money if it means moving, and many others are holding their homes off the market in anticipation of high prices to be had in the near future.

Real estate investors looking for non-performing mortgage sales, big discounts on notes and bargain priced REOs are going to have to dig deep, get creative, and stay ahead of the crowd. This means developing an elite knowledge of the market and looking behind the headlines into the real data. Ultimately it’s all about contacts and having the best sources for properties and non-performing mortgage note sales.