Home Price Increases Don't Encourage Speculative Buying, HomeVestors Says
Tough Financing, Low Appraisals, Seller Reluctance Decrease Chance of New Housing Bubble
DALLAS - April 30, 2013 // PRNewswire // - Lenders who are reluctant to finance real estate, appraisers who won't always agree to the increased value of homes on the market, and sellers who wonder where they will go if they sell are preventing the much heralded housing market boom from turning into another housing bubble, according to David Hicks , co-president of HomeVestors, also known as the We Buy Ugly Houses® company.
And that's good news, says Hicks, commenting on a recent report out from the National Association of Realtors revealing a shortage of homes for sale and higher price points for those on the market. "That puts the brakes on the speculative type buying that could generate a false bubble. What the market needs is steady, consistent increases."
HomeVestors is the professional home buying network of independently owned and operated franchisees and the number one buyer of houses in the U.S. The company has been in the business of buying homes for investment since 1996 and has been consistent in buying houses even in down markets. In fact, they have purchased more than 50,000 of them since they started.
"At the price point of the market we generally service, typically at or below the median price, securing a fair appraisal and financing are typically the major challenges our franchisees face when selling a property," Hicks said. "Since we focus on 'ugly houses' that owners are anxious to sell, we're not as affected by seller reluctance as is the general market. Everything our franchisees have for sale is selling quickly and in fact, the first quarter of this year was one of the best ever."
But he said HomeVestors® franchisees, who typically buy and fix up homes, have noted an increase in buyer reluctance for the homes they put on the market for sale. "In areas where prices have increased significantly, buyers are not totally sure the market is back and don't want to overpay."
All of the factors—financing, low appraisals, seller and buyer reluctance—are also holding back the rate of price increases in most markets, Hicks said. "Prices have not yet risen at the pace of demand. We would have expected prices to rise higher than they actually have," he said.
About HomeVestors of America Inc.
Dallas-based HomeVestors of America, Inc. is the largest buyer of houses in the U.S., with 50,000 houses bought since 1996. HomeVestors trains and supports its independently owned and operated franchisees that specialize in buying and rehabbing residential properties. Most commonly known as the "We Buy Ugly Houses®" company, HomeVestors strives to make a positive impact in each community. In 2012, for the seventh consecutive year, HomeVestors was among the prestigious Franchise Business Review's "Top 50 Franchises," a distinction awarded to franchisors with the highest level of franchisee satisfaction. For more information, visit www.HomeVestors.com.
SOURCE HomeVestors of America, Inc.