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For-sale homes in California are sparse, even in areas with high foreclosure rates. It has led to buyers like Jennifer Bryant, who is willing to throw money at just about anyone willing to sell her a house.
Since February, Bryant has made 35 offers on homes in Riverside, only to be elbowed out by other bids. With few houses available and many bidders chasing these properties, she feels she has, at most, an hour to consider each house.
"Some of these houses that I've offered on, I haven't even actually seen," she says. "If my husband can't go by it, I'll just make an offer on it. If I haven't seen pictures of it, I'll just make the offer on it."
Bryant spends lunch breaks by the fountain in front of the medical center where she works. Using her phone, she looks at the day's new listings.
As Bryant glances over a description of a fenced home with large trees on its front lawn, she guesses it's pending a cash sale. And maybe so: The house was off the market within five hours of its listing.
Bryant sometimes offers more than the asking price, even getting up in the middle of the night to check more listings. She says she's desperate to leave her tiny rental, which has no air conditioning and costs more than a mortgage.
The cruel irony for Bryant is that she sees vacant homes everywhere, from her drive to work to a neighboring home where she resides. But vacant does not mean available. The house may still be in the process of foreclosure.
Paul Herrera, government affairs director for the Inland Valleys Association of Realtors in Riverside, says there are 40 percent fewer homes on the market compared with last year, and sales volume is up.
Herrera says homebuyers like Bryant are often losing to a growing field of investors, often backed by Wall Street, who are willing to pay cash.
"Cash is always king in this sort of situation," he says.
Investors Outbidding Families For Homes
In front of a county courthouse in Corona, about 80 bidders with lawn chairs sit in the shade as trustee sales for foreclosed properties are under way. Nearly all of them have their cellphones and envelopes full of cashier's checks to pay for their winning offers.
No one here is bidding on a home to live in it. They're people like Gabriel Anguiano, who's recast himself from golf course manager to minor real estate tycoon. In the past four years, he's bought and rehabbed 120 houses to rent or flip.
"I would buy a $30,000 condo, put in another $5,000 in remodels and then sell it for 80, 90. So you make $50,000," he says.
Demand for rentals is also high because those who lost their homes need a place to stay. Anguiano can rent a property and still make a tidy profit. The only problem is that others are catching on.
The activity on foreclosed homes is happening in several other hard-hit markets. But a low-inventory issue is the opposite of what many housing experts expected to see.
After five major banks settled cases with regulators over mismanaged foreclosures earlier this year, analysts expected a flood of new inventory. It didn't come.
Experts say banks may be reluctant to foreclose because they don't want to recognize a loss on their books. Or perhaps banks may be giving homeowners more time to modify loans. Either way, the foreclosure process has, if anything, slowed further.
Revamping Abandoned Homes For Buyers
Sean O'Toole founded ForeclosureRadar, which keeps data on foreclosures. He says government officials have misdiagnosed the country's housing problem, focusing policies mostly on foreclosure prevention. But in doing so, they simply slowed a recovery.
"We worry about the blight from foreclosures, but once a house is foreclosed upon, it's resold to somebody who's going to take care of it and fix it up and pay the property taxes," he says.
That's when home shoppers like Mike Strugatz come in. He's bought two dozen distressed properties that have been pillaged by looters or former owners.
As Strugatz surveys a four-bedroom ranch-style home, it bears all the marks of abandonment. It smells of dog, there's graffiti on the walls, and the empty pool is filled with debris.
Strugatz says only cash investors can buy homes like this. It wouldn't appraise for a buyer with a loan.
"Creating inventory out of a property like this, which doesn't count as inventory in its current condition, is really what I'm doing. So I'm really feeding the market with inventory that wouldn't be there," he says.
His efforts help the bank that needs to sell, the family that needs to buy, and the community that needs a healthier housing market.