Where are the deals?
Some stats have suggested there is little housing inventory out there, with Realtors claiming just a handful of weeks’ of homes for sale in some parts of the country.
So where can real estate investors find enough deals to fuel the volume they desire for flipping houses or acquiring rentals without running into absurd competition?
A new Bloomberg report comments that almost $1.5 trillion of home equity was added last year. Now many homeowners are seizing on that and are beginning to sell. Ironically many are still selling at a loss. It appears the whole short sale opportunity has still been lost on them.
There are many underwater homeowners out there who could do short sales, especially with the extension of the mortgage forgiveness act and new $8.5 billion mortgage settlement.
JP Morgan Chase puts this number at around 7 million underwater borrowers. However, this is contrasted with Zillow’s data showing 14 million U.S. homeowners with negative equity at the end of the 3rd quarter 2012. Either way we are still talking about a figure that is equal to two or three years’ worth of housing inventory.
Of course not every underwater homeowner wants to sell but many would if they knew that they could. Plus of course there is still a huge pool of delinquent mortgage loans in the works which can be acquired in various ways.
However, Zillow has unveiled additional data claiming to have found almost 21 million U.S. homeowners who own their properties free and clear. That’s almost 30%. Of course given Zillow’s track record with home values this could easily be off by 25% or more in either direction. Still, it shows huge opportunities for real estate investing if you know where to look and who to target.