Real Estate Investors are Back! Will They Save the Market?11 months ago
A new survey by Move, Inc. found that investors coming back to the real estate market in droves. In March of 2009 the survey found that only 5.6% of buyers were planning on purchasing a home as an investment and in March 2010 that number has climbed to over 17%, more than 3 times the amount last year!
Many blame investors for the current issues facing the real estate market, could it be the same people that got us into this mess will get us out of it? Well it’s probably not the same people because the “investors” that got us into this mess have mostly lost all their money and have short sales and foreclosures on their credit. The investors that are buying real estate now are what I call the “smart money”.
The investors we are seeing now are much smarter than the investors that were trading properties and contracts during the boom like Wall Street trades stocks. These are long term investors, the survey found that nearly half of these investors plan to hold the home for 6 years or more. Also, these investors aren’t over leveraged as 12.3% plan to purchase their investment home with all cash and another 12.8% will be making at least a 50% down payment.
Investors seem to be gobbling up the short sales and bank owned properties in Tampa Bay. For the entire Tampa Bay area over the last 6 months 16,461 homes sold and 6,956 were purchased with all cash which is 42%. For the under $150k sales, which is where most of the investors are concentrated, the all cash buyers represented 53% of the market. Investors are back and they are helping turn this market around and more importantly they are conservative buyers who are not over leveraged. This is another sign that the real estate market is a good place to be putting your money right now!