According to the National Association of Realtors (NAR), “nearly 1 million homes were bought as investment properties in 2010”[1]. While real estate investors and real estate agents have not always been the best of friends, this development has encouraged many realtors to extend their services to investors more willingly in hopes of also extending their business capacity in troubled times for the real estate market. “It [buying and flipping] is absolutely viable,” says one agent and investor in Austin, Texas, “but you have to buy intelligently and go after the right opportunities.”
Interestingly, those investors doing the buying are increasingly doing so from outside the United States. In fact, NAR also reported that $41 billion worth of property was purchased by foreign investors in 2010 and that 28 percent of realtors have at least one international client[2]. While at first this might seem like bad news for native investors, in reality it is opening up the market because many real estate investors prefer to actually buy from other investors in flips rather than scouting the deals or buying off the foreclosure block. Sales to foreign investors are currently concentrated in Arizona, California, Florida and Texas, but are spreading throughout most of the country thanks to a weak real estate market and a weak dollar.
According to forecasts from government-controlled GSE Freddie Mac, in 2011 home sales will likely increase 5 percent in 2011[3]. A lot of this activity can be credited directly and indirectly to investors both at home and abroad. How do you feel about real estate investors’ newly-critical role in the housing recovery?
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[1] http://money.cnn.com/2011/04/13/real_estate/vulture_investors_profits/?section=money_latest
[2] http://247wallst.com/2011/04/13/more-foreigners-snapping-up-foreclosed-property/
[3] http://www.dsnews.com/articles/freddie-mac-market-outlook-predicts-an-increase-in-home-sales-2011-04-15
I and my fellow investors in Central Florida Reality Investors Association believe the real estate market will be saved by investors. Since banks aren’t loaning unless you have 20% down and sterling credit, there’s nowhere else to turn if you want to sell or buy in a timely fashion.