Investors continued to boost their activity in the housing market during the month of February, according to the latest results of the monthly. Campbell/Inside Mortgage Finance HousingPulse Tracking Survey. And short sales have become a new target for investors now that other homebuyers have lost their enthusiasm for these popular but often lengthy and unpredictable transactions.
The total share of distressed properties in the housing market in February, as represented by the HousingPulse Distressed Property Index (DPI), continued to climb, reaching a near-record of 48.7%, using a three-month moving average. This was the second highest level ever recorded by HousingPulse and the 25th month in a row that the DPI has been above 40%.
All of the growth in the distressed property share of the housing market over the past six months has been driven by an increase in short sales. Over the past six months, the proportion of short sale transactions in the market has climbed from 17.0% to 19.8%.
Investors buying homes surged from 20.9% of all transactions in September 2011 to 24.2% of all transactions in February 2012, the latest survey results showed
The investor share of short sales likewise grew from 25.9% to 30.6% during the same six-month period. In contrast, the proportions of first-time homebuyers and current homeowners purchasing short sales have dropped since September. The waning interest of first-time homebuyers and current homeowners in short sale transactions is largely driven by dissatisfaction with the long-approval times of mortgage servicers and unpredictable closing dates. Investors find short sales more attractive because they do not have to deal with the complications of breaking rental leases or moving from another home on short notice.
Housing Pulse Trends March 2012
Susan N. Giove, Ed.D
Mann and Sons, Inc.