While many institutional and cash buyers flocked to the market last year, snatching up distressed properties, erasing shadow inventory and driving up prices, we are currently seeing a decrease in interest from these “get rich” investors.
Investors accounted for 20.2 percent of home purchases in May—still high, but down from a peak of 23.1 percent reached in February, according to the Campbell/Inside Mortgage Finance survey of real estate conditions.
Reports from the National Association of REALTORS® show a decline in foreign buyers — a big source of investors in U.S. single family homes and condominiums, and a recent release by RealtyTrac show that hedge fund investors are slowing as well.
However, while last year’s house-hungry investors seem to be packing away their cutlery, a new breed of investors are approaching the table. These conservative, or “value,” investors are purchasing properties in cities that are showing sustainable promise.
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