Where I live, in the middle of flyover land, it is almost impossible to buy a reasonably priced house. All of the houses on the market are either way overpriced or distressed to the point of being irreparable. You would think that after the housing bubble burst in 2008 you would be able to get one on the cheap, but that is exactly when the housing market ceased to be a good deal.
What happened is that houses quit making it to the market and began to sell directly to investors. A realtor will sign a house, ask the seller what their bottom dollar is, and contact their investors. A couple of weeks later the seller has a check and their house never made it to the MLS listing.
I know some investors and they started buying up houses in 2008. At first they had to look online at houses and compete with individuals wanting to purchase a home, but then their realtor started contacting them when they signed the house. They bought a lot of them that way, but then the houses started drying up.
They finally figured out that their realtor was selling to another investor in California. They didn’t know how to get the realtor to sell to them, so I suggested raising the commission percentage paid to sweeten the pot, and once again they had a lot of houses to buy. I’m pretty certain that this was how the California buyer got the realtor to sell to them exclusively in the first place.
A friend tipped me off to this first; he had a rental house that he wanted to turn into cash so he contacted a real estate associate. The associate looked at the house and immediately asked his bottom dollar. Two weeks later he had a check in the bank and his house never made it to the market.
Think of how easy that was; the associate didn’t have to take pictures, upload the house to MLS, post the house on various websites, worry about curb appeal, show the house to a myriad of buyers or share the commission with another associate.
Around these parts, it is almost impossible to get a real estate associate to show you a house. The only ones that will do so are the ones that specialize in HUD homes that are not eligible for purchase by investors. The larger realtors won’t even bother unless the house is really expensive or newly built.
We tried to buy another house for a few years and wondered why every house we looked at, no matter how expensive, was completely distressed. Every house we looked at had terrible foundation problems and huge cracks in the basement. The only decently priced houses were in absolutely horrible neighborhoods. It makes so much more sense now.