As the traditional summer vacation season wrapped up, it became easier to focus on the economic performance over the first half of the year. However, the task became an exercise in reading fortune cookies given the many changes in the economy, the markets, and the legislative environment.
The share of distressed properties on the market continued to decline in April. Approximately 18 percent of REALTORS® who responded to the April REALTORS® Confidence Index Survey and who reported a sale sold a distressed property, substantially down from levels a few years ago.
REALTORS® continued to report strong demand for REOs from investors who reportedly win against first-time homebuyers. About 37 percent of reported sales made to investors were distressed properties, compared to about 17 percent in the case of first-time homebuyers.
- The sales price for investment properties rose for the second consecutive year. The share of investment buyers who paid all cash for their home purchase remained steady from 2011 at 49 percent.
- Investors in 2012 remained active in buying distressed properties that were on the market. Twenty-four percent of investment property buyers purchased a home in foreclosure, and 23 percent purchased a short sale property.
- Similar to vacation property buyers, this is a slight decline, which is reflective of fewer distressed homes on the market available for purchase.
- The typical investment buyer plans to own their investment home for eight years.
NAR has estimated residential sales to foreign buyers at $ 82.5Billion for the 12 months ended March 2012, approximately 8.8 percent of the total residential market by dollar volume (http://www.realtor.org/reports/profilse-of-international-home-buying-activity). Data for estimated commercial real estate sales to foreigners are more limited. Real Capital Analytics provides information for transactions greater than $2.5 million. RCA has reported the total market for larger U.S. commercial property sales over 2001-2012 at approximately $2.8 Trillion, with purchases by foreign buyers in the neighborhood of $212 Billion, or 7.7 percent of total sales.
REALTORS® reported that investors accounted for 20 percent of total residential sales in October (18 percent from September). According to the latest REALTORS® Confidence index, approximately 58 percent of respondents who reported a sale to an investor reported a cash sale (compared to 67 percent in August).