Find out what the current real estate investor market overview says about today's real estate market
Tracking investors in the real estate market can sometimes shed some light on the state of the industry. The California Association of Realtors recently released it’s annual investor survey, detailing investor’s share of the marketplace and where they are putting their funds.
The survey found that real estate transactions are declining overall, both for homeowners and investors. Investors transactions have declined about 55% since 2014.
In general, it seems investors tend to buy more than they sell, however the share of buyers has been gradually declining from 56% in 2014 to 48% in 2016.
Investors Like Southern California
The lion’s share of investors is concentrated in Southern California. What is interesting to note, however, is the percentage of out of state investments seems to be an emerging market.
Less Single-Family Purchases
Real estate investors tend to target single-family homes, which still claims 70% of the investor market. But single-family investment purchases did drop 8% from 2013, while there was a significant increase in the “other” category.
In 2014 we were still seeing a lot of short sales and foreclosures. Today, about 87% of the transactions are traditional sales.
Bigger Is Better
Investors are targeting larger multi-family units, averaging 6 units per property.
Both the listing prices and sales prices of investor properties have been on the rise since 2013.
The pace of home sales slowed down in 2015, but it appears to be picking back up. Investor properties were listed for an average of 23 days before accepting an offer.
Investors are spending a little bit more on the remodel, whether that mean a more extensive remodel or more expensive finishes. The average remodel cost increased $3,500 from last year.
Investors can expect a slight increase in their ROI this year from last year as well.
Location, Location, Location
Location is the first thing investors are concerned with, followed by the rate of return. If you have a stellar location, you can ensure a good ROI!
94% of properties purchased by investors last year were not subject to rent control.
Fewer Cash Buyers
The ratio of cash buyers to financed buyers is beginning to even out. Cash buyers hold a much smaller lead than in previous years.
Real estate is a true entrepreneurial investor’s market. 69% of real estate investors are individuals, not a business or partnership!
Minority groups are growing in the real estate investment market as well.