Real estate investors are accounting for a larger portion of existing home sales, according to a recent report issued by the National Association of Realtors (NAR). In today’s article from Kristine Zelazo, the Short Sale Gal, we’ll explore this finding and how it’s impacting the real estate marketplace here in Florida and the nation as a whole.
The past few years have brought about economic recovery, which has resulted in a reduction in the number of short sales and distressed property sales — transactions which often involve real estate investors. The National Association of Realtors’ data reveals that despite this, the number of properties that are purchased by investors is currently on the rise.
NAR FIGURES ON PURCHASES BY REAL ESTATE INVESTORS
The month of February saw a decline of over 7% in existing home sales, which went from 5.47 million in January to 5.08 million in February 2016. That’s according to NAR’s Existing Home Sales Report.
Compared to last year, February saw a 2.2% increase in sales of existing homes.
But here is where things get interesting. Real estate investors are accounting for a larger number of those existing home sales (and in 64% of those transactions, the investors paid cash for the property.)
According to NAR, real estate investors accounted for 17% of all existing home sales in January; this figured increased to 18% in February. This signifies a high point, as the real estate market hasn’t seen this number of real estate investor-purchased homes in nearly two years (since April of 2014.)
Real estate investors are also accounting for a larger portion of short sale purchases, REO purchases and other distressed property sales too. These figures increased by one percentage point in the month of February 2016.
Bolstering the real estate investors’ interest in distressed properties are the dipping prices. In the month of February, investors paid an average of 17% below market value for foreclosed homes (a 4% increase from the prior month). Similarly, investors paid an average of 16% below market value for short sale properties (a 4% increase from the prior month of January.)
“Now that there are fewer distressed home available, it appears there’s been a shift towards investors purchasing lower-priced homes and turning them into rentals,” explained National Association of Realtors’ Chief Economist Lawrence Yun. He added, “Investor sales have trended surprisingly higher in recent months after falling to as low as 12% of all sales in August 2015.”
A LOOK AT THE CURRENT 2016 REAL ESTATE MARKET
Overall, the current real estate market has a relatively low supply, which is not-so-great news for real estate investors. But it’s good news for homeowners who are selling their homes, as listings are enjoying a significantly shorter amount of time on the market.
NAR reports that the average number of days on the market was 59 days in February 2016 — a 5-day drop from the prior month, which averaged 64 days. And approximately one-third of all homes on the market in February sold in less than one month!
Short sales and distressed property sales are traditionally on the market longer and it’s reflected in the figures. In February 2016, short sales saw an average of 126 days on the market. Foreclosures went relatively quickly, averaging just 57 days.
BUYING OR SELLING A HOME WITH KRISTINE ZELAZO, THE SHORT SALE GAL
If you’re in search of an investment property, wish to get involved in real estate investments such as buying short sales, but are unsure of where to begin, turn to Kristine Zelazo, the Short Sale Gal! In addition to helping buyers and sellers with short sale transactions in South Florida and beyond, The Short Sale Gal Kristine Zelazo also works with a small number of real estate investors who are seeking to get involved in short sale investing, rehabbing and fix and flipping properties.
Kristine Zelazo has years of experience in the real estate investing field, so she’s well-positioned to provide guidance to new investors who are seeking a mentor and business partner.
In addition, The Short Sale Gal also serves as a short sale expert and licensed Realtor, assisting individuals who are seeking to sell their distressed properties in a short sale in South Florida and beyond.
If you’re seeking to sell your home in a short sale or wish to sell your home to an investor, simply complete the home pre-sale form to provide Kristine with additional information on the property in question. Questions? Call 800.664.0616, x802.