Small-scale real estate investors are less enthusiastic about the state of the U.S. real estate market – and their reasons for concern largely mirror those of the average home buyer today, according to a new survey.

Real estate data company RealtyTrac reported that 48% of individual real estate investors consider the investment market to be worse or much worse than it was a year ago, based on the results of a survey led by the company. That’s up from 45% of investors in last year’s edition of the same poll.

RealtyTrac surveyed family investors who buy between one and 10 properties per year, including investors who return homes and those who keep them as rental units. These investors own most of the single-family rental properties in the country.

Notably, RealtyTrac found that a smaller proportion of investors in this edition of the survey planned to return homes. This aligns with Previous search from RealtyTrac’s parent company, Attom Data Solutions, which found the frequency of home returns was down from historic levels as profit margins remained depressed.

When it comes to the top concerns of real estate investors, the most cited response was the rising cost of homes, which 63% of respondents cited as a major challenge. Next comes the lack of available inventory, cited by 57% of investors.

Almost two-thirds of real estate investors see rising house prices as a major challenge.

Other major concerns included the cost of materials and labor for home construction and improvement projects, as well as competition from traditional home buyers.

“It’s no wonder that individual investors think the market is less favorable today than it was a year ago,” Rick Sharga, executive vice president of RealtyTrac, said in the report. .

Another issue that could affect investor views on the state of the US real estate market is the foreclosure situation. The availability of mortgage forbearance and an ongoing moratorium on foreclosures at the federal level meant that foreclosure activity declined by about 70% in August compared to the same period in 2019. According to RealtyTrac, the number of foreclosed homes are at an all-time low. checked in.

Due to the appreciation in house prices, many people who are forborne and behind on mortgage payments may be able to sell their home rather than default. Investors remain divided over whether they think foreclosure activity will return to normal in the future or exceed usual levels, the survey found.


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