Active REO listings in Greater Phoenix (including HUD listings) reached a low point of 1,053 on May 31, 2012 and then started to rise quickly during the second half of the year reaching a peak of 1,665 on December 3. Since then the number has fallen away  down to 1,383 today. Given the numbers of lender owned homes that have not yet been listed and the dwindling number of pending foreclosures, this downward trend is likely to continue until we get back down to normal levels. The age of the REO is drawing to a close. All these numbers pale into insignificance compared with the 14,424 that were active on January 16, 2009 at the height of the REO era.

This explains why investors acted a lot less and cash deals also getting less. It is the time for financed investors come in to play before the prices and interest rates get higher and higher.

What’s the indicator for financed investors?

It is not about the REO getting vanished. It is not about cash deals disappearing. It’s also not the investor mortgage interest rates going over 4% or housing prices increased over certain percentage.

It’s the Cash On Cash Rate! Capitalization rate is more for the cash investor while cash on cash is for the financed investors to decide whether to act or not.