Complex factors influence and direct the national housing market's recovery, and real estate investors are one element that has helped re-introduce more funds and quality properties.
These buyers have been an important part overall, but they have also boosted several specific markets, such as California and Florida. Generally favorable housing statistics, such as mortgage and financing rates - as well as ideal home prices and low yields - are encouraging investors to buy, according to the California Association of Realtors.
An attitude shift for investment strategies
Trendy home flipping is a common solution to an abundance of distressed homes on the market, and investors are usually leading the charge to pick up any foreclosed houses. Overall, motivations are changing, and more are choosing to hang on to a recently-acquired short-sale, instead of the quick fix-up and re-sale, CAR noted based on its 2013 Investor Survey.
The report found that 66 percent of investors who worked with CAR believed that a long-term investment strategy has now become preferable to the flipping mentality. Two-thirds intended to own a property for at least one year, while 26 percent of those asked indicated a sale in less than a year was the goal.
This is a change from the speedy home-flipping strategies that have previously dominated the mindsets of many investors. Bank owned properties often become targets for this segment of the market, but maintaining the homes for over a year wasn't always the popular decision.
The most commonly purchased properties were single-family homes, according to CAR. Almost 80 percent of all transactions were of this type, and multi-families made up 14 percent of total sales, while the rest included bulk sales and other properties.
In addition, prices on investment properties often fluctuate. The cheaper the better, since a fast financial return is typically the goal. Recently, real estate records indicated the median sales price of investment properties was $272,500 - and 80 percent of investors intended to make repairs despite many not intending to sell immediately, CAR added.
Investors find profits in multiple markets
Activity is increasing, and 30 percent of all re-sales in markets tracked by John Burns Real Estate Consulting were attributed to investors, said John Burns, owner of the firm. Florida and Nevada are seeing a boon in this regard, and the overall real estate recovery is driving up home values and prices.
Near Tampa, some homebuyers are getting assistance from investors. Martha Bingham was selling her home, and she nearly received her entire listing price when an investment group purchased, according to The Tampa Tribune.
This sort of activity has helped re-invigorate a downtrodden housing sector, the news source added. Some foreclosed houses might not be bought and sold if not by investors, and they are also part of the reason for rising prices.
Moreover, in Nevada investors are a big factor in the real estate market. Investment trusts are estimated to have nearly $850 billion in U.S. real estate, according to the Reno Gazette-Journal.
This market was hit particularly hard, and it was stimulated by similar trusts which bought properties and integrated more cash into the area's economy, the news source added.