Real Estate Investors Pessimistic on Current and Near-Term Market — RISMedia

Despite a red-hot housing market and forecasts suggesting it will remain so, investors have concerns, according to RealtyTrac’s latest investor sentiment survey.

Almost half (49%) of respondents felt conditions had gotten worse over the past year, while 30% felt conditions had stayed the same. Looking ahead, 43% believe the market will stay the same over the next six months, while 31% believe it will either get worse or even get much worse.

More insights:

  • Around 63% of those surveyed named inventory as the biggest challenge when investing in residential real estate.
  • Rising home prices were named as the second biggest challenge at 60%.
  • Almost a third (31%) of respondents believe prices will increase by 0-5%, while 25% said they will remain at current elevated levels over the next six months.

Take away:

“Similar to our last two surveys, the issues of low inventory and rising home prices are the top-cited issues by individual investors across the country,” said Rick Sharga, EVP at RealtyTrac, an ATTOM company, in a press release. “Combined with supply chain disruptions that have led to product shortages and increased material costs, it’s not surprising that individual investors think the market isn’t as healthy today as it was a year ago.”

“One looming concern is that of inflation,” Sharga noted. “Some 88% of investors surveyed were concerned that inflation could impact their business, whether due to higher material and labor costs, higher interest rates or rising consumer prices, which could weaken demand from potential home buyers and renters.”