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Institutional Investors Migrate in Second Half of 2012

""Radar Logic"":http://www.radarlogic.com/ reports a seasonal price dip in January but a 12.7 percent increase year-over-year. The firm continues to find heavy investor influence in many markets, though investor activity may be shifting somewhat into new markets.


Radar Logic's RPX Composite Index, which measures prices in 25 metros, posted a 2 percent decline in January. Prices remain 31 percent below their June 2007 peak.

""We continue to expect housing markets to exhibit greater than normal volatility,"" the firm stated in its most recent report.

Institutional investors are playing an active role in many markets but appear to be shifting out of some markets where they previously played a major role and into some smaller markets previously largely ignored by the group.


For example, after increasing their purchases by 88 percent over the first half of the year in Phoenix, institutional investors largely abandoned the market in the second half of the year.

Radar Logic suggests the exodus from Phoenix resulted from depleted REO inventories and rising prices--consequences of the flood of investor purchases in the first half of the year.

With Phoenix no longer as desirable a market, institutional investors turned to Miami, Los Angeles, and Atlanta--three previously hard-hit markets now experiencing an influx of investor demand.

New York and Chicago also experienced rising investor demand in the second half of last year â€" increases of 61 percent and 85 percent, respectively.

A few smaller markets reported climbing investor demand in the second half of the year as well. While the number of homes purchased in these markets may not yet rival some larger markets, the percentage increase in investor demand in some smaller markets was notable.

Charlotte, North Carolina, experienced a 628 percent increase in investor purchases in the second half of 2012.

Sacramento, California recorded a 101 percent increase, and Tampa, Florida recorded a lesser but still notable 76 percent increase.


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