Short List
Investment Blues
Rising prices and decreased availability of discounted distressed properties slowed the housing investment market last year, according to NARs 2014 Investment and Vacation Homebuyers Survey. Investment-home sales fell 8.5 percent in 2013, which may be due to a decline in the inventory of once-plentiful and inexpensive foreclosure, REO and short-sale properties available for sale.
Investment sales represented 20 percent of all sales in 2013, down from 24 percent in 2012, but the median investment-home price was $130,000 last year, up 13 percent from $115,000 in 2012. Cash purchases accounted for 46 percent of investment-home transactions in 2013.
In 2011 and 2012, investment property was a no-brainer because home prices had sharply over-corrected during the downturn in many areas, creating great bargains that could be quickly turned into profitable rentals, NAR chief economist Lawrence Yun says. With a return to more normal market conditions, investors now have to evaluate their purchases more carefully and do their homework.
