Investment Property Sales Declining Compared to Total SFR Sales

[Corey Dutton]

According to preliminary data from the NAR (National Assoc. of Realtors), the number of investment properties, as a total percentage of total home sales, is declining. Put another way, investment properties made up approximately 22% of total home sales in 2013. In 2011 investment properties made up approximately 27%. This combined with rising home prices in some areas of the U.S. have made the single family home market a little less attractive for some real estate investors in recent months.

Blackstone Group has purchased over $7 billion in single family homes over the past several years. Blackstone, and other hedge funds who have followed their lead, have increased the competition in some U.S. markets drowning out many small-time real estate investors. In California, Arizona, and Georgia for example, hedge funds like Blackstone have been able to purchase large tapes of single family homes, which otherwise would have been pieced out to small groups of real estate investors.

The heightened competition in these U.S. markets has forced many real estate investors into other markets, which has then triggered increased competition in markets not targeted by hedge funds. What is happening in your area of the U.S. real estate market? Have you seen sales declining for investment properties in your area of the real estate market over the past 12 months?

Posted by Corey Curwick Dutton