“Last year, the amount of institutional investors activity exploded. What you’re seeing now is the natural digestion of that exponential growth. That means maybe a slowdown in how many home they acquire, it may mean letting go employees in areas where it doesn’t make sense.”

These investors are moving their focus from acquisition to profitability, hoping to show Wall Street that the business model is not only feasible but highly profitable. The American Home now boasts 2,500 homes in Atlanta; Nashville, Tenn.; Orlando and Tampa, Fla.; and Charlotte, N.C.

Edelheit said rental demand is tremendous, and management is working well, but the model is still too green for the larger investment community. “You look at the stock prices of the companies that are public, and it’s pretty clear that Wall Street remains unconvinced in the single family rental model, and I think it’s natural for these firms to start right sizing and make sure that they are profitable.”

That could mean consolidation, with some of the larger firms that have stronger management structures buying up smaller players. Large-scale investors are still a relatively small segment of the 14 million single family rental market, but it appears they are here to stay, despite the recent volatility. Smaller investors, however, may be moving on, having exhausted their cash and their credit opportunities.

(Read more: Home prices across the US defy gravity)

Last spring, Redfin was running seminars for small “armchair” investors on how to buy and manage single family rentals. The classrooms were packed.

“There was a surge because people read the papers—in March, April, there was a bull market in housing. Suddenly at every cocktail party somebody wanted to make a killing in real estate,” Kelman said. “Some wanted to ride the wave, but some just caught it late.”

—By CNBC’s Diana Olick. Follow her on Twitter @Diana_Olick.

Questions?Comments? facebook.com/DianaOlickCNBC

Article source: http://www.cnbc.com/id/100988740

Aug. 12 (Source: By Eve Mitchell, Contra Costa Times, Walnut Creek, Calif.) - When the country’s credit rating was downgraded, experts thought interest rates would shoot up, another jolt to the struggling real estate market.The opposite happened, but that good news has been offset by the stock market’s wild swings.

Low interest rates can attract homebuyers, but that is only one part of the decision, said Faramarz Moeen-Ziai, a mortgage banker with San Ramon-based Bank of Commerce. A healthy job market is more important.

“The primary factor driving a purchase decision is people’s income,” he said. “And until we see unemployment go down, we’re not going to see (an increase in homebuying).”

Refinancing is another matter, however, as homeowners who have adequate equity rush to take advantage of low interest rates. “In the last week, we’ve noticed a spike in refinancing,” said Moeen-Ziai, who estimated that volume has about tripled.

The past two weeks have certainly been a test for the Bay Area housing market. Wild stock swings, the credit downgrade and continuing concerns about the economy have certainly weighed on buyers, sellers and their agents.

Rebecca Gallardo with Protello Group Real Estate Services in San Jose said she had a client pull out of a deal “because of the volatility. He thinks he’ll get a better deal come December.”

But not everyone is spooked.

“The financial unrest of last week has not had an impact on my decision to buy a home. I still consider purchasing a home one of

the best investments I can make,” Matthew Le, a 26-year-old San Francisco renter who is looking to buy a home in Pleasant Hill, wrote in an email.

“I have not had a buyer walk,” said Joy Di Ricco, a Realtor with the Antioch office of Better Homes and Gardens Mason-McDuffie Real Estate.

Still, it’s important to communicate with buyers, Di Ricco added. “They’re nervous,” she said. “If you don’t communicate, you will lose your buyers.”

Before it was evident that interest rates would be heading south, Realtors said they fielded calls from some concerned clients.

Cathy Warshawsky of Bay Area Home Loans in San Jose said she had several clients who were “working like mad” with their Realtors over concerns that interest rates would go up. “They were really scrambling.”

But other agents were surprised by their clients’ calm.

“I thought a lot of my buyers would be calling me saying, ‘I’m frightened’ about this and that and the other. But actually my buyers are acting contrary to how I might have expected them to,” said Anne Walker, an agent with Coldwell Banker in Cupertino.

“There’s so much pent-up demand for purchasing real estate that people (who) are so strongly set in moving in the direction of purchasing, that no matter what happens with the stock market and the SP rating, it just doesn’t seem to be deterring them.”

Economic issues are of course a factor, but for many buyers the choice is really about a place to live.

“Buyers are still careful buyers,” said Kristine Marr, a senior loan officer with RPM Mortgage in Walnut Creek. They want to find the right home and that’s what’s driving the buyer mostly as long as they are preapproved and ready to buy,” she said.

Contact Eve Mitchell at 925-952-2690 or emitchell@bayareanewsgroup.com.

Source: By Eve Mitchell, Contra Costa Times, Walnut Creek, Calif.

To see more of the Contra Costa Times, or to subscribe to the newspaper, go to http://www.contracostatimes.com/.

Copyright (c) 2011, Contra Costa Times, Walnut Creek, Calif.

Distributed by McClatchy-Tribune Information Services.

For more information about the content services offered by McClatchy-Tribune Information Services (MCT), visit www.mctinfoservices.com.

A service of YellowBrix, Inc. Publication date: 2011-08-12

<!–

Article source: http://www.loansafe.org/homebuyers-have-mixed-reactions-to-market-swings

Sales of newly built homes fell around 2 percent in May from the previous month, but that was a little better than expectations, given the lousy home builder sentiment number we got this month and the huge supply of competing existing and distressed properties.

But let’s put this monthly move in perspective, shall we?

The 319,000 sales pace is 14 percent higher than the record low set in February, but new home sales are still 77 percent below their peak in 2005, and 900,000 is considered healthy.

But how’s this for an odd statement:

“The one positive in this report was the further fall in the number of new homes for sales, from 172,000 in April to yet another record low of 166,000,” writes Paul Dales at Capital Economics. “With fewer new homes for sale than ever before, at some point homebuilding activity will have to increase, but we can’t see it happening for several years yet.”

That’s the positive??

You could look at the home prices, down 3.4 percent, which is less than the 5 percent drop in existing home prices in May. But then you have to remember all the concessions builders are throwing in, and you also have to look at the fact that the median price of an existing home is 30 percent less than that of a newly built home. How’s that for competition?

Page 1 of 2 | Next Page
Show Entire Article

Week Ahead: Expect Volatility as Fed Takes Away the Security Blanket

Investors Pare Money Market Holdings Amid Greece Worries

Why Austerity Doesn’t Matter: Greece Is Still Going to Default

European Banks Scrambling to Prevent Default by Greece

“Columbo” actor Peter Falk dead at 83

More Top Stories

Article source: http://www.cnbc.com/id/43511660?__source=RSS*blog*&par=RSS