Despite a red-hot real estate market and forecasts suggesting it will remain that way, investors have concerns according to RealtyTrac’s recent Investor Sentiment Survey.
Nearly half (49%) of respondents felt that conditions had grown worse over the past year, while 30% think that conditions have remained the same. Looking ahead, 43% believe that the market will remain the same during the next six months, while 31% believe it will either be worse or even be much worse.
Additional findings:
- Approximately 63% of survey respondents cited inventory as the top challenge for investments in residential real estate.
- Rising home prices was noted as second-largest challenge at 60%.
- Nearly one-third (31%) of respondents believe prices will rise by 0-5%, while 25% stated they will remain at the current elevated levels during the next six months.
The takeaway:
“Similar to our last two surveys, the problems of low inventory and rising home prices are those most often cited by individual investors across the country,” said Rick Sharga, EVP at RealtyTrac, an ATTOM company, said in a press release. “Together with supply chain disruptions which have caused product shortages and increased material costs, it is not surprising that individual investors think that the market is not as healthy today as it was a year ago.”
“A looming concern is that of inflation,” Sharga noted. “About 88% of the investors surveyed were concerned about inflation having an impact on their business, whether that was due to higher material and labor costs, higher interest rates, or rising consumer prices that might weaken demand from potential home buyers and renters.”