Investors are back

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Anyone who’s shopping for a mid-priced or low-priced foreclosed house already knows this, but Irvine consultant John Burns has some data confirming what many are seeing in the marketplace: landlord investors are out in full force.

Unlike housing bubble flippers, who hope to resell properties in a short time period for a profit, investors now are purchasing rental properties. These are the kinds of folks you see paying cash for foreclosed houses, frustrating many who are seeking homes as primary residences.

These landlord investors aren’t as likely to cause the kinds of market chaos generated by flippers, Burns said. Because they typically must put up large down payments (and many pay cash), they won’t become upside-down if house prices fall a moderate amount. If they put the houses back on the market to take profits, Burns said, that will mean the market has recovered.

Nationwide, the percentage of investor purchasers is up to nearly 26%, from about 21% in 2006.

-- Peter Y. Hong