With 25 percent of delinquent mortgages across the nation belonging to investors, flippers played a big role in the housing implosion that began in 2006. According to MSNBC.com, purchases by people who owned other homes contributed significantly to the inflating housing bubble – ramping up prices across the nation.
By that same inflation of prices, values dropped just as precipitously when the bubble burst.
Investors defaulted in large numbers after home values began to drop in 2006. They accounted for more than 25 percent of seriously delinquent mortgage balances nationwide, and more than a third in Arizona, California, Florida, and Nevada from 2007 to 2009.
As a result, millions of homeowners saw their home values decline so that they were worth less than the original purchase price. Foreclosures skyrocketed as people couldn’t or refused to pay their underwater mortgages. Residential construction also languished, putting hundreds of construction workers in the hardest-hit states out of work.
Cash buyers are best positioned today to step in and save the housing market.
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