Flippers and Investors Boosting Dallas-Fort Worth Real Estate Market?

I came across an interesting article today on the National Public Radio website that suggested flippers and investors were contributing quite a bit to the current market.  Before the downturn, the National Association of Realtors reported that less than 10% of sales were cash transactions.  In the current market the report states that nearly 1/3 of home sales consist of all cash transactions.  That is a big statement.  Real estate investors understand that when others are fearful, it is time to be greedy and cash is king. 

With so many investors snatching up properties for all cash, you start to realize their confidence in the market here locally.  When you purchase a home all cash there is no ”walking away” to let the bank deal with the loss if the property depreciates.  It comes strait out of your pocket.  The most important thing to remember is you make your profit on the buy, not the sell.  Right now it is very difficult to find a bank who will finance flip deals.  The cash coming from the investors is definitely having an impact on the Dallas-Fort Worth market and competition is stiff on REO properties while banks continue to move their portfolios of foreclosed homes.  You can find these deals all day long priced on average about 30% below market value. 

I think the flippers are definitely doing the community a service.  Getting the lower priced, dilapidated properties out of the pipeline as quickly as possible and adding value to neighborhoods which in turn stabilize and motivate appreciation.  I mean come on even the government is on board with this and has ceased the 90 day anti-flip rule for buyers using FHA loans.  As long as the bank’s inventory keeps on coming prices will stay flat and investors will continue to pump cash into the market.  The question is will they be able to keep up?