"Vultures" boosting housing market

With the widespread foreclosures found in many areas, Bloomberg reports a number of investors - dubbed vultures by some - have swooped in to purchase large numbers of foreclosed properties, rehab them and then put them back on the market for buyers or rent them out.

Low home prices have served as an incentive to many investors, who are able to use all-cash sales to avoid the current mortgage market.

In some situations, Bloomberg says the investors allow many first-time buyers access to some homes they otherwise would have been locked out of. Analysts told the source that lenders won't offer mortgages on many foreclosures because they don't have utilities, or appraisal values don't match up.

Other firms rehabilitate the homes and then manage them as rentals for other investors, a trend known as turnkey transactions. The source says one firm, currently working in Houston, Indiana, Colorado and Florida, manages more than 200 properties, and adds more each month.

However, the trend isn't limited to the Houston real estate market. The National Association of Realtors says all-cash sales made up 33 percent of home sale transactions last month.

Courtesy of 2M Realty News