Real estate investors respond to rising prices Investor purchasing intentions have changed significantly since August, when only 30 percent said they planned to buy fewer properties in the next 12 months than they did in the previous year. In the latest survey, the percentage of investors who said they plan to cut back on purchases in the coming year rose to 48 percent. Only 20 percent said they plan to increase purchases compared to 39 percent 10 months ago. While they may be buying fewer new properties in the year to come, however, over half of the investors who own rental properties plan to hold them for at least five years or more. One-third, 33 percent, of investors plan to keep them for 10 years or more. “Higher prices are reducing returns on investment, and investors are responding by cutting back on their purchasing plans until conditions sort out. Fewer foreclosures, rising property values and competition from hedge funds are making it tough to find good deals on distress sales,” says Chris Clothier, partner in MemphisInvest and Premier Property Management Group. “On the other hand, investors are planning to hold onto their rental properties for at least eight to 10 years and realize the benefits of rising rents and low vacancy rates. Cash flow is much more important than appreciation.” Investors purchased 24 percent of all existing homes sold in 2012, a decline from 27 percent in 2011, according to the National Association of Realtors. The drop in purchasing intentions could result in a further decline in investor market share in 2013.
Posted on: Thu, 06 Jun 2013 20:01:07 +0000
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