As rising home prices signal the start of a housing recovery, there's some chatter about whether investors will begin pulling out of the market -- and how that might affect the market's continuing recovery.
Last week, I wrote about the drop in the number of first-time homebuyers and received comments from readers suggesting that the cause lies, in part, with competition from investors. "I can tell you from experience that the first-time homebuyer is having a very hard time competing with INVESTORS in today's market," Jaime commented.
But that may be changing. A monthly survey of more than 2,500 real estate agents suggests that higher prices and fewer foreclosed properties on the market are stalling investor purchases, leaving the market open for traditional homebuyers. That would signal a return to a healthy market because traditional homeowners buy a home with the plan to live in it, not turn a quick profit.
Campbell Surveys, which takes a monthly pulse from agents, reports that investor purchases fell to 21.9 percent of all real estate transactions in July, down from 23.5 percent in June and 25.3 percent in May. Meanwhile, the number of homes for sale has also dropped in July by nearly 24 percent from a year ago, according to the National Association of Realtors.
Greg, another reader, wrote in to say: "If the latest figures are correct, then the rising prices are now pushing investors to the sidelines so maybe there is a silver lining?"
Are you noticing more healthy home sales activity in your area?
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