The CALIFORNIA ASSOCIATION OF REALTORS®’ “2013 Investor Survey” captures important details about the role investors play in the California housing market. The survey targeted REALTORS® throughout the state who had worked with investors within the 12 months prior to April 2013 in order to better understand their impact on the recovery in the past four years. The demand for investment properties has been fueled by low mortgage rates, attractive home prices, and low yields on alternative assets. The survey found that investors continue to see today’s real estate market as ideal for a long-term investment strategy because two-thirds (66 percent) of investors who worked with a REALTOR® indicated they are going to keep the property for more than a year, while about one-fourth (26 percent) of investors intend to flip the property within a year. Making sense of the story
- Three-fourths of investors are of the small mom-and-pop type, owning 1-10 other investment properties, with 15 percent owning just one property, 46 percent owning 2-5 properties, and 14 percent owning 6-10 properties, the investor survey found. Twenty-seven percent of investors were foreign investors, with China, India, and Mexico being the top countries of origin.
- Single-family homes were the preferred property type for investors, with 78 percent of transactions involving single-family homes. Multifamily properties comprised 14 percent, 7 percent were other property types, and bulk sales made up only 1 percent.
- The median sales price of an investment property was $272,500. More than eight out of every 10 investors made repairs to their investment properties, spending a median of $10,000 – or 4 percent of the median sales price.
- Investors spent a greater percentage (4.2 percent) of the sales price rehabilitating properties costing $250,000 or less than they did on properties costing $500,000 or more (3.4 percent).
- Among the reasons investors bought or sold now include profit potential (34 percent), good price (26 percent), low interest rates (10 percent), personal reasons (6 percent), and location (4 percent). More than two-thirds (67 percent) of investor buyers paid cash.
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