While many families struggle to find the funds to purchase their own home in today’s market where the deals abound but credit is tight, real estate investors are making the market work by buying in bulk. According to the National Association of Realtors, real estate investors represented 17 percent of all home sales nationwide in 2010. And that number is likely to grow as conventional funding continues to be difficult to obtain and the ability to spot and make a creative deal becomes more and more valuable.
As foreclosures continue to drag home prices downward, more and more real estate investors who may have exited the market prior to or during the housing bust are now re-entering as home prices become too much of a bargain to resist. And while historically investors have been demonized for everything from driving prices up to keeping them down, today many markets are relying on them to keep the entire machine from grinding to a standstill. For example, in Florida 17 percent of all homes are currently vacant. Without investors buying up homes, rehabbing them and selling them – probably still at a steep discount – those properties will drag home prices down in their areas indefinitely. “If Florida is going to have a comeback anytime soon, investors are going to have to play a role,” explained RealtyTrac vice president Rick Sharga. “There are just too many properties for traditional homebuyers to absorb,” he said.
In fact, while Moody’s Investor Services predicts that nationwide, home prices will stabilize by the end of 2011, distressed areas of the country might not stabilize until 2012 or later. Without investors, this process could be literally interminable