For four months running, nearly 20% of properties sold in metro Phoenix have been sold to investors. Is that enough to drive the market? Twenty percent seems like a significant minority but I suppose you could argue the question seven ways till Sunday.
It’s commonly accepted wisdom that “investors created the housing mess by buying homes on speculation.” True or not? Another question we could argue till we run out of breath. Or beer.
But it's a statistical truth that the number of investor sales in Spring 2009 (20%) exceeded the number of investor sales in Spring 2005 (about 16%). Spring 2005 is generally accepted as the beginning of the boom in metro Phoenix real estate.
The Cromford Report’s definition of “investor sales” is based on the "intended use" filed with the county recorder. Short of reading people’s minds, that’s the best number you can get.
What’s interesting to me is that, unless investors are lying en masse, 80% of homes sold this past spring went to folks moving into the home. That’s a lot of people taking a gamble on becoming a homeowner during the worst down market since the 1930’s. Maybe the combination of historically low interest rates and affordable homes really has gotten people off the fence.
The National Association of Realtors, 2009 Network Television Commercial, courtesy of YouTube