So you're thinking about investing in real estate, huh? There is a lot more that goes into it then what you see from the late night "Get Rich" info-mmercials, any real estate agent will tell you that! I thought I would pass along some interesting statistics to give you an idea of where the investment market is headed in the near future, especially after the rough few years that we have put behind us.
Via Steve Harney, KCM:
Investment purchases of residential real estate remained elevated for a second consecutive year, according to the National Association of Realtors (NAR)’s2013 Investment and Vacation Home Buyers Survey, covering existing- and new-home transactions in 2012.
Here are the key findings from the report:
Investment home sales declined 2.1% to 1.21 million from 1.23 million in 2011. These sales had been well under a million during the market downturn
Investment sales accounted for 24% of all transactions in 2012, down from 27% in 2011, marking the second highest share since 2005
- 47% of investment homes purchased in 2012 were distressed homes (Foreclosures & Short Sales)
Investment-home buyers in 2012 had a median age of 45
35% of investment buyers purchased more than one property
- 47% of investment buyers said they were likely to purchase another investment property within two years
Reasons for Purchasing
55% of investment buyers said they purchased for rental income
30% wanted to diversify their investments or saw a good investment opportunity
20% wanted to use the home for vacations or as a family retreat
- 16% purchased the property for a family member, friend or relative to use, often for a son or daughter to use while attending school
Property flipping modestly increased in in 2012 but was different than past practices.
Investment buyers plan to hold the property for a median of 8 years
6% of homes purchased by investment buyers last year have already been resold, up from 5 years in 2011
- 8% are planned to be sold within a year, the same as 2011
- Investors bought a home that was relatively close to their primary residence – a median distance of 21 miles, although 29% were more than 100 miles away
The median investment-home price was $115,000 in 2012, up 15% from $100,000 in 2011
The median down payment for investment home buyers was 27%, the same as in 2011
- All-cash purchases remain common in the investment-home market. Half of investment buyers paid cash in 2012
Some interesting stats for the US market, but remember that every state, city & neighborhood is different. If you are considering investing be sure to speak with a professional in the industry that has experience dealing with these types of transactions.
Sean S. Williams
Licensed Broker, Realtor®, ABR®, e-Pro®
1st Time Buyer & Relocation Specialist
of Louisville, Kentucky
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