A July 22, 2013 report by CNBC.com Business News reporter Diana Click began this way: “They swarmed the distressed housing market, buying thousands of foreclosed properties and pushing prices higher and faster than anyone expected. Now investors are pulling back, dissuaded by the higher prices they themselves brought about.”
15% of June 2013 sales were by investors, according to the National Association of Realtors. This is the 4th consecutive month investor sales have fallen. N.A.R. says this is the lowest investor share since tracking began in October 2008.
Slowly, it appears, current homeowners are starting to drive the market. And, typically, first-time homebuyers make up 40-45 percent of the home buying market. They are at about 29% of buyers right now, N.A. R. reports. These buyers have competed in a market with limited supply and cash buyers. Plus, they usually have smaller downpayments and typically need financing.
Here is the opportunity for owner carryback financing to help in restoring the housing market to some degree of “normalcy.” If a first-time homebuyer, for example, has 10% downpayment but not 20%; has 600 credit but not 650; and has moved into town 1 year ago with a new job, young family and extended family close by – he just might be an excellent prospect for an owner carryback sale. A solid citizen should be recognized by a savvy broker or seller, who can sit down and agree to terms that are protective for both parties. And if the seller would prefer to cash out, he can receive 6-12 payments and take his well constructed owner carryback note to the marketplace and sell it.
He should find a receptive notebuyer. Everybody wins.
