Investors are driving up housing prices. They pay in cash. People that want new homes cannot compete. When they try to compete with the investors, the investors bid more money.
The investors are buying to rent.
This may drive up the price of renter's insurance along with the price of houses.
However, the successful crop of cash buyers reportedly includes "international investors".
Why would "international investors" invest in houses in the United States?
When prices on foreclosed houses go up, the value of these 'assets' is marked up too. That increases the value of these assets on the investors' balance sheets.
Are there other forces at work? Are there government including tax regulations and benefits that the general public does not know but the investors and their servicers know?
The investors have all the information it appears. (In bad-faith parlance, this is often called "information asymmetry," where one side has a huge advantage over the other in holding important information.)
No-one taking their cash is asking the investors any questions at this time. See Jennifer Medina and Katharine Q. Seelye, "As Home Sales Heat Up Again, Buyers Must Resort to Cold Cash" p. 1, col. 5 (New York Times Nat'l ed., Sunday, June 9, 2013).
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