Good News for ‘Typical’ Home Buyers

Investment Purchases

(Above is a map detailing the investment purchases in 2014 by region.)

In a speech delivered earlier this year, Secretary for HUD Julián Castro, called 2015 “A Year of Housing Opportunity”. A recent report by The National Association of Realtors (NAR) revealed that investment home sales decreased 7.4% in 2014 to an estimated 1.02 million.

What does this mean for the ‘typical’ homebuyer?

Lawrence Yun, NAR’s Chief Economist gave some insight:

“Despite strong rental demand in many markets, investment property sales have declined four consecutive years to their lowest share since 2010 as rising home prices and fewer distressed properties coming onto the market have further reduced the number of bargains available to turn into profitable rentals.”

This is great news for the housing market. If fewer properties are being sold to investors, they are instead being sold to American families who are entering the housing market in droves.

Details of the Report

There are many reasons buyers purchase a home as an investment property. Those who made a purchase in 2014 listed the opportunity for rental income as their top reason (37%).

Below is a graph showing the top three reasons:

top 3 reasons

 

The median investment-home sales price dropped 3.8% to $125,000, from $130,000 in 2013.

According to Yun, “the decrease in vacation and investment sales prices is likely due to the increase in vacation and investment buyers purchasing condos and townhouses, which contributed to a decline in the median size of 200 square feet for both.”

The drop in price can also be attributed to the majority of investment purchases being located in the South (37%) where there are often better deals from a pure pricing standpoint.

Uncle Sam002

Bottom Line

The housing market is continuing to recover and thrive. If your plan for 2015 includes buying your first, second or even investment property – contact a local real estate professional to evaluate your ability to enter the market.

Follow and Share this blog for current real estate news and views for Tampa Bay, Sarasota and St Pete.

Call Christina Stramiello at Lifestyle by Design today for your free real estate consultation. No strings, no pressure, just great information.

Visit wwwLifestyleByDesignRealEstate.com to view available homes directly off the MLS.  (Faster and more relevant than third-party sites such as Zillow or Trulia.)

Next:  The Difference Between A Home’s Cost vs. Price

By Christina Stramiello, PA

Lifestyle by Design Real Estate
813.334.1145

Broker: Robert Slack Fine Homes, LLC
3320 SW 33rd Rd, $100
Ocala, FL 34474

About Christina Stramiello

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