It has happened quite often in the past several years. You have your Real Estate agent present an offer on a property that you fell in love with and is perfect for your family. However, your agent comes back and lets you know that there are four offers on the property. Your offer is above the asking price so you think, my offer will be the one the seller decides to take. But investors with cash and deep pockets are also making offers on the property.
In the past several years, the investor with the cash offer would more than likely have won out and been able to purchase the property. But in a recent trend, traditional home buyers are beginning to win out.
The traditional home buyers—who were more than often outbid by investors wielding large sums of cash and snapping up 30 and 40 properties at a time—are finding a foothold in the housing market again. As prices continue to rise and distressed properties are harder to come by, investors are drastically pulling back on their buying activity, opening the field for more everyday buyers.
This of course includes the smaller investors who are not interested in large portfolios, but in flipping the investment property. According to RealtyTrac, the number of home flips, fell from 6.2% to 4.2% of U.S. single-family sales between the 2nd quarters of 2013 and 2014.
In Florida, cash sales have been down 6.1% since the fourth quarter of 2013. This means that cash sales are about 42% of all sales statewide, according to Florida REALTORS® data.
With the good news for traditional home buyers, there still remains the issue of tight inventory . New construction, which has a lag time to catch up to demand, has not reached the required units to keep up with demand. And the big investors who came into residential real estate starting in 2011 did so with a buy-and-hold strategy. Institutional investors realize that if they flood the market with homes, they would create a negative impact on the market.
Since demand is still outpacing supply in the market, you need a qualified real estate agent to guide you to the process of a winning bid. In most cases that means having an adequate down payment, making an emotional appeal to the sellers, and calculating the best possible offer to present to the seller.
So in the end, NO, investors are not buying all the good properties. And with historically low interest rates, it is still a great time to buy a new home for you and your family.
If you would like information on your local market, please contact us and one of our associates would be happy to help you in your real estate needs.
Rene Sabatini
Azure Realty Services, Inc
954.946.3838
