By Peter Ricci
Housing investors have been one of the more interesting outcomes of the post-boom real estate market, as they have snatched up the scores of highly inexpensive distressed properties that sit throughout the country – and according to a new survey from BiggerPockets.com and Memphis Invest, they may just be getting started.
Housing Investor Heaven – 2013 and Beyond?
The BiggerPockets/Memphis Invest survey uncovered a number of interesting things about today’s crop of housing investors, especially:
- Thirty-nine percent of those investors surveyed indicated they plan to buy more properties over the next 12 months than they did the year before, while 26 percent said they will purchase the same amount.
- One out of eight, or 28.1 million Americans, are either active investors or owners of investment properties, a figure that, as CBS News pointed out, is not entirely surprising, given the high number of single-family rentals currently on the market.
Social Benefits of Active Housing Investors
The survey from BiggerPockets/Memphis Invest also took a highly intriguing look into the social benefits of housing investors, finding that investors are roughly spending $9.2 billion per year to renovate and repair distressed properties, compared to the $7 billion that Congress has approved for the Department of Housing and Urban Development’s Neighborhood Stabilization Program throughout the past four years.
In other words, private investors are spending more on repairing properties and restoring communities each year than HUD in the last four combined.
Also, just as influential are the housing investor’s impacts on housing inventory. As anyone with even the smallest inkling of the current housing market knows, following the boom years, housing inventories skyrocketed, but, because of the work of housing investors, both visible and shadow inventories have fallen substantially in the past year – and indeed, a sustainable housing recovery will not be possible without a balanced housing inventory.
Interestingly, though, as the National Association of Realtors has demonstrated, housing investors’ share of the real estate pie has declined somewhat in recent months. Though investors averaged a 22 percent market share from 2003 to 2011, that share has fallen in 2012, and from April to August, the share was just 18 percent.
So are the housing investors in the BiggerPockets/Memphis Invest survey waiting, perhaps, before reentering the marketplace? We’ll get a better idea on Oct. 19, when NAR revises those market share numbers in its existing-home sales report.