While there is talk of a softening US housing market due to high prices, it seems as though this trend is not deterring real estate investors from buying property in the US.
Real Estate Investor Purchases in the US
A report by CoreLogic Inc. found that in 2018, more than 11% of homebuyers where real estate investors, including large private-equity firms, real estate speculators, and smaller investment property buyers. This is the highest ever recorded number of real estate investor purchases in the US housing market. In fact, it is almost double the number of purchases before the housing market crash in 2008.
Related: Housing Market 2019 vs 2009: How Has Your City Fared?
After the boom in real estate investments thanks to the spike in foreclosures after the crash, experts believed investor purchases would decrease. However, properties are still being bought at a high rate for use as single family rentals or for other investment strategies such as flipping. Even though the number of investor purchases in the US housing market slightly fell between 2015 and 2016, it has since increased to numbers higher than the last peak.
The US markets that were dominated by investors in 2018 included Detroit, Philadelphia, and Memphis. In these cities, real estate prices were affordable and investors could make a good ROI by buying them up and renting them out. CoreLogic analysis shows that half of all starter homes in the Philadelphia real estate market and around 40% in Detroit were purchased by investors.
To start looking for an investment property in any one of these cities, click here.
Why the Increase in Real Estate Investment in the US Housing Market?
There are a number of reasons why real estate investments have become more popular in the US housing market. Besides the general benefits of real estate investing, currently there is strong rental demand nationwide thanks to high property prices. Would-be homebuyers are living in rental properties for much longer now than older generations. In fact, cash buyers are dominating the lower end of the market where these homebuyers would otherwise enter the market. CoreLogic reported that real estate investors bought 1 in 5 US homes in the bottom third price range in 2018.
One of the more prominent reasons real estate investors are buying up more of the US housing market is the fact that it can be done online with ease. Tools like Mashvisor allow investors to find and analyze investment properties in minutes. With this kind of technology, real estate investors are finding success when buying rental properties.
Related: What Is Mashvisor? What Can Do It For Real Estate Investors?
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