Prices, Rental Demand Attract More Investors, HousingPulse Finds
DC (November 22) – Low home prices and strong demand for rental
properties are causing a surge in investor buying, according to the
latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey.
purchases hit 22.3% of closed transactions for the month of October, up
from just 19.6% as recently as July. For the past three months, investor
participation has exceeded 20%, continuing a long-term trend of
increased investor interest in the housing market.
combination of low home prices and growing demand for rental units make
purchasing damaged Real Estate Owned (REO), fixing up the properties,
and then collecting monthly rents, an attractive financial play. In
October, average prices for damaged REO hit $101,100, the lowest price
recorded in two years. In contrast, home prices for non-distressed
residential properties averaged $266,700 in October.
pushing down average home prices overall is the high proportion of
distressed properties found in today’s housing market. The
total proportion of distressed home sales, as represented by the
HousingPulse Distressed Property Index (DPI), rose a full 4
percentage points to 48.4% in October, up from to 44.4% in September.
the gap between the supply of distressed properties and their absorption
by first-time homebuyers widened to 13.7 percentage points in October,
from a reading of 8.8 percentage points in September. This shows that
first-time homebuyers have become less active in the distressed property
rental units remains strong. Campbell Surveys estimates that 61.6% of
investor properties purchased during the month of October will be rented
out, with the remainder being flipped.
are prominent in the city of Las Vegas. They both flip and rent and buy
properties in bulk. Renting single family homes is an extremely viable
option and seems to be a growing trend in the valley with the decreasing
of prices. Our inventory is dropping so we are seeing more investors
becoming aggressive with their offers,” reported a real estate agent
from Nevada in the latest HousingPulse.
current conditions in the market here locally, many of the investors are
purchasing homes to rent until the market turns around then possibly
looking to sell in a few years. Yes, at this point renting homes is a
better option than flipping because the gap between what an investor can
buy a house, fix it and flip it does not cover the cost of re-selling
it,” added an agent from California.
needs are great, and since no one can GET a mortgage, fix and flips are
dying,” observed an agent in Colorado.
Campbell/Inside Mortgage Finance HousingPulse Tracking Survey
involves approximately 2,500 real estate agents nationwide each month
and provides up-to-date intelligence on home sales and mortgage usage
information on the survey, contact John Campbell at Campbell Surveys at
(202) 363-2069 or firstname.lastname@example.org.
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