As you probably could have guessed, I'm not going to jump on the bandwagon and say that the housing market is all fine and dandy now that we've seen two months of big jumps in existing home sales.
In fact, that bandwagon isn't all that crowded; a lot of the housing cronies are saying that this big surge is all about the first time home buyer tax credit, which was originally supposed to expire November 30th but was then extended to closings by June 30th. The numbers today represent buyers who weren't banking on the extension. Now that demand has been pulled forward so much, we are going to see a falloff after one more monthly reading.
Instead I want to look at the impact investors are having on the monthly sales numbers. After the regular press briefing at the National Association of Realtors this morning, I did my usual chat with Lawrence Yun, NAR's chief economist. He volunteered, "We have seen some bulk purchases by investors, but we are not picking up that data through the Multiple Listing Service or through our release data, but we do know that there is some bulk purchases by investors who plan on releasing those properties within a year's time, when they see a better market condition."
I found that so interesting that I emailed over to Mark Hanson, a housing and mortgage expert out in California. He says the bulk buying was much bigger last year than it is now, and in fact there is no shadow inventory around to buy in California today. Yun says the same: "Interestingly what I hear from Las Vegas, San Diego, Riverside and other areas is they are really desperate for inventory in the lower price range....and even though they have buyers that want to buy there's not enough inventory." Yun put it out there to banks to release anything they have.