OfflineRISMedia.com is an online magazine type site for real estate professionals. This week they ran an article titled “A New Breed of Real Estate Investor: The Value Investor.” While we can definitely inform them that this is far from a “new” breed, it is timely in that the value real estate investor is returning to the market in greater numbers as things improve.
A lot of media coverage is currently focused on the drop in flipping and foreclosure property investment activity. Of course, as foreclosure inventories shrink competition heats up, and fewer investors can scoop up a bargain, so they’re stepping back from the market. In may, investor activity accounted for 20.2% of all buying, down from a high of 23.1 percent. That’s true for flippers and foreclosure buyers, but the value buyer is moving back in as the markets improve. There has also been a decline in foreign buyers reported by the National Association of Realtors.
As cities and regional markets begin to show sustainable improvement, value investors are stepping in to purchase properties with a stable future anticipated return on investment. They’re not buying discounts, but they are buying homes in areas where the market is growing, and where home prices are showing stability and a promise of a sustainable appreciation in value.
CoreLogic monitors housing markets and prices, and released a report this week showing that July prices are expected to rise by 12.5 percent on a year-over-year basis. The rise is 1.8 percent from the previous month, the fastest pace since 1977. CoreLogic states that there has been a remarkable 10% increase in prices the first half of this year.
The investors returning to the market are turned off by volatility and are looking for strong fundamentals and long term ROI. States like Texas, the Carolinas, Tennessee and Ohio are showing significant activity from these value investors. As other cities around the country stabilize and the turn-around seems to be sustainable, value investors will step in and contribute to a long term improvement nationally.
If you’re working with real estate agents, it’s good to know that some will be more educated about value investing, improving their services to you.
That is fantastic information, and something we need to be aware of as we forge head in our investing. As I tell my students all the time; it’s not the 1st realtor, it’s the right realtor. Though many agents are aware of the contributions we investors can make to an area and to them, many of them still don’t understand, or don’t want to understand what it is we do. The importance of educating our agents is a fundamental to our progress and success in real estate. It’s providing them information as listed above, and continuing to feed them information that will allow a symbiotic relationship where both the agent and we achieve our goals. Never stop learning, and never stop sharing what we have learned.
Great information!
Thanks for sharing!
Stephan Roberts
"In absence of clearly defined goals, we become strangely loyal to performing daily acts of trivia!"
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