Gulf Shores 
home prices have been rising steadily for the past several months, but some fear the rapid increase could actually start hurting the housing recovery.
The rise in Gulf Shores home prices is mainly due to investors, mostly large hedge funds, that have been swooping into various area and inhaling properties as fast as their plentiful cash will let them. They are turning those properties into rentals, and getting anywhere from 8 to 12 percent returns on their investments, thanks to still hot demand. The trouble is, as Atlanta home prices rise, those returns shrink.
Gulf Shores Home Prices Recovery at Different Rates
While Gulf Shores home prices are recovering at a somewhat different pace than the rest of the country, they are recovering. Some areas are still in the red, while other areas are seeing double-digit increases in prices.
Even outside the Gulf Shores metro market, this national housing recovery is dependent on investors, who are largely all-cash buyers. The mortgage market is still too restrictive to support the kind of bulk-buying that needs to occur, and many potential buyers either lack the credit scores or the confidence to jump in. Another 14 million borrowers still owe more on their mortgages than their homes are worth, according to Zillow, and are therefore unable to move.
Foreclosures will remain elevated for the foreseeable future because 5 million properties nationwide are either in the foreclosure process, or their owners are behind on their mortgages. Another concern is that Gulf Shores home prices are rising faster than incomes, which could push owner-occupants away just as they were starting to get into the market again.
Nationwide, the risk of sales dropping as investors leave different markets is higher where the biggest drop in prices was felt in the first place, like Gulf Shores home prices. While we believe the market has turned positive for the most part, there are still some areas of the economy that could affect Gulf Shores home prices in the future, and we’ll keep you up to date on those right here on our website. Bookmark our site and check back daily, or add our RSS feed to your RSS reader for continuous updates.