Home prices are on the rise mostly driven by investors snatching up deals in their local market.
According to real estate analysts with the DBRS report released last week home acquisitions by investors are likely to keep pushing home prices higher. Discounts are continuing to become scarcer as confidence in the real estate market is beginning to rise.
There is a clear increase in housing demand from 2011 to 2012. The National Association of Realtors said at the end of last month that October’s pending home sales index was up 13.2% from one year ago and marked the 18th straight year-over-year gain. Des Moines has also seen a steady increase in sales of roughly 14% over 2011.
This is happening while completed foreclosures are down 17% for October 2012 from October 2011. All is a good indicator of a recovering housing market, but we are still seeing more then twice as many foreclosures as we did from 2000 to 2006. In other words it is a slow, but likely steady recovery. Investors are able to pay cash and buy much more than an average home buyer. This alone could be considered the main reason for the slow rise in prices and less homes available for purchase.