The Flip Side of the Housing Crisis, by Victor Makras

September 27, 2012

Are you still wondering what caused the housing and mortgage crisis? According to, more than one-third of the mortgages from 2006 were for second homes, and many of these houses were purchased with little or no down payment. Here in California, more than one-half of all purchases between 2000 and 2006 went to house flippers, and many of those buyers already owned three or more homes. Meanwhile, when prices fell, nearly one-third of the foreclosures in our area belonged to investors, not to owner-occupants.

What does this mean for the future of San Francisco real estate? Since lenders have tightened restrictions on mortgages, most investors have gone back to financing their properties the old-fashioned way—with cash. This means that as foreclosures leave the market, prices will recover.

About the Author:

Victor Makras serves as President of Makras Real Estate in San Francisco, California.


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