No more low end owner occupied? (agents, contracts, Realtor, listings)

[olecapt]

Seeing a new phenomena as this mess matures. There appear to be very few to no sales to owner occupied at the low end.

At 50K to 75K we are seeing over 80% cash and conventional. Below 50K it is something like 92% cash and conventional.

This is a sampling of the contracts opened in early June.

Above 100K it appears that FHA and VA are well over 50% of sales.

I would also note that the majority of MLS listings are for cash/conv only and the agents are refusing FHA offers. Even Homesteps (Freddie Mac) offerings are doing it.

Sounds like an easy way to unload listings but very bad public policy.

[chet everett]

If I get your drift, you are thinking that INVESTORS are turning what used to be "owner areas" into "tracts of rental homes". That may be the case, and if it is the investors may be creating a mess for themselves. Single family rental homes clustered together are no easier to manage than large apartment complexes, and in some ways harder to prevent declining values...

The lenders do this to themselves by NOT WORKING WITH BORROWERS, and that is a damned shame.

[MMichelle]

Many owner occupied buyers pay cash or use convential.

I don't know your market but remember VA is an expensive transaction for the SELLER. So if the seller is taking a hit on price they often don't want to accept VA.

Another point to consider - condition of the property. VA & FHA do their own inspections. If they find frayed carpet, a sticky door - they will require the seller fix it before closing. So again, the burden is increased on the seller. There may be many cases where the seller simply is not willing to do any fix up and wants to sell it "as is". Unless the property is in very good condition that won't work for VA & FHA.

I've worked with all type of buyers - owner occupied and investors. FHA is not available to investors. I've had several owner occ. buyers pay cash. I would say most owner occupied buyers I've worked with have used conventional financing.

[middle-aged mom]

"VA & FHA do their own inspections."
__________________________________________________ ______________

Neither VA or FHA perform or require a home inspection.

VA/FHA lenders are required to use approved VA/FHA appraisers who follow VA/FHA guidelines. This is not your typical appraisal nor is it a home inspection.

Buyers should always hire their own home inspector regardless of the type of financing they use.

[olecapt]

Originally Posted by middle-aged mom

"VA & FHA do their own inspections."
__________________________________________________ ______________

Neither VA or FHA perform or require a home inspection.

VA/FHA lenders are required to use approved VA/FHA appraisers who follow VA/FHA guidelines. This is not your typical appraisal nor is it a home inspection.

Buyers should always hire their own home inspector regardless of the type of financing they use.

And the FHA appraisal is reasonably sensible. They don't do sticky doors or frayed carpets. The do bad sinks and non-working or missing stoves.

The problem I think is that they are inserting all renters into the most fragile neighborhoods. You have the older holdouts who have hung on and the recent first time homebuyers. Now you introduce large numbers of renters to neighborhoods that probably have too high a percentage already.

Here is a chart that shows how bad it actually is...

http://www.donohueteam.com/Realtor/R...s/Lowendct.htm

And it is trivial to show that virtually none of either the cash or conv buyers are owner occupied.

We are talking here about 1200 or so homes per month. And reasonably concentrated in a few central city areas.

It won't take very long.