Mortgages Blog

Finance Blogs » Mortgages » Investors heading for the exits

Investors heading for the exits

By Judy Martel · Bankrate.com
Tuesday, July 23, 2013
Posted: 5 pm ET

Investors are backing out of the housing market as home prices begin to rise and traditional buyers return.

The National Association of Realtors reports that in June, 15 percent of real estate sales were to investors, the lowest percentage since October 2008.

"Investors who were getting 50 to 60 cents on the dollar are now getting 80 to 90 cents on the dollar, and that's not enough juice for them to make a return," says John Walsh, president and CEO of Total Mortgage Services in Milford, Conn.

Investors who entered the market when the housing bubble burst bought thousands of foreclosed properties at greatly reduced prices. "They've had a long-term play because they got a lot of value from their investment in the beginning," Walsh says. Unlike home flippers who usually seek a quick turnaround, investors typically buy homes to fix up and rent in order to make a profit until they can sell at a later date, he adds.

During the recession, investors played an important part in the housing recovery. Foreclosed properties that might have remained vacant were revived and rented, maintaining home values in neighborhoods. As they begin to sell, it's good news for buyers, Walsh says, because it loosens up inventory of existing homes.

Keep up with your wealth and mortgages, and follow me on Twitter.

Get more news, money-saving tips and expert advice by signing up for a free Bankrate newsletter.

«
»
Bankrate wants to hear from you and encourages comments. We ask that you stay on topic, respect other people's opinions, and avoid profanity, offensive statements, and illegal content. Please keep in mind that we reserve the right to (but are not obligated to) edit or delete your comments. Please avoid posting private or confidential information, and also keep in mind that anything you post may be disclosed, published, transmitted or reused.

By submitting a post, you agree to be bound by Bankrate's terms of use. Please refer to Bankrate's privacy policy for more information regarding Bankrate's privacy practices.
2 Comments
Add a comment

(Comments may take 5-10 minutes to appear)