As home prices rise, the number of investors in the housing market appears to be starting to cool. The number of investment properties purchased last year dropped 2.1 percent compared to 2011, according to a recent National Association of REALTORS® report.

Investors are making up a smaller number of home buyers, shrinking from 27 percent in 2011 to 24 percent in 2012. However, investment buyers still make up a large percentage of buyers compared to historical standards.

“Investors have been very active in the market over the past two years, attracted mostly by discounted foreclosures that could be quickly turned into profitable rentals,” says Lawrence Yun, NAR chief economist. “With rising prices and limited inventory, notably in the low price ranges, investors are likely to step back in coming years.”

Investors in 2012 purchased a median home priced at $115,000, which is a 15 percent increase over 2011, according to NAR.

Investment buyers also appear to plan to hold onto their properties longer than in the past, with a median of eight years now compared to five years in 2011, according to NAR.

The author of this article is: realtormag.realtor.org

 See the original post at: http://realtormag.realtor.org/daily-news/2013/04/04/investors-gradually-retreating-market

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