Last year, across the nation, investors purchased 1.23 million homes, a 64.5 percent increase over 749,000 in 2010. About 7 million Americans – consider themselves to be real estate investors. An additional 9 percent of all Americans own investment property today but have no current plans to buy more. Thus, one out of eight – 28.1 million Americans – either consider themselves to be residential real estate investors or own residential investment properties today.
At a median expenditure of $7,500 to update and repair these investments—per property—investors are spending a total of $9.2 billion per year just to repair the damage caused by foreclosures and rehabilitate the nation’s housing. Investors are driving their local economies by spending billions with local electricians, plumbers, roofing companies and laborers. Not to mention home improvement stores, appliance and carpet stores and—drum roll please—Realtors.
A friend in the mid-West wrote that in her area, probably only 15% of the “For Sale” signs are still left from a couple of months ago. The For Sale signs have been replaced by remodeling signs. So either the houses sold and the new owner is fixing-up, or folks took their homes off the market to make some updates that will help sell the place.
In Wisconsin, where she lives, she says home prices are still anemic and backlogs of unsold homes are still at unprecedented levels after several years. I personally believe that we have seen the bottom of this slump, but I am now told that The National Association of Realtors revised the number of homes sold between 2007 and 2010 down by 14%! That’s huge.
Back then we knew we were in the dumper, but we all thought things were on the upswing, obviously it was worse that we were being told—as a result, just this week more than 32,000 Florida real estate licensees were not renewed by the Sept. 30, deadline.
We knew it was bad back then, we just didn’t know how bad it was. The numbers for last month (August) show Florida’s housing market having more closed sales, more pending sales, higher median prices and a reduced inventory of homes. Statewide closed sales of existing single-family homes totaled 18,669 in August, up 10.8 percent compared to the year-ago figure. Closed sales typically occur 30 to 90 days after sales contracts are written. That’s all positive—now all we need are more jobs.
Buyers who have been waiting on the sidelines should see this as a sign to jump in before the market escapes them again. Sellers who have been hesitant to sell should consider putting their homes on the market now. Chances are they will entertain multiple offers and be able to take advantage of historically low interest rates to buy their next home.
Dane Hahn is a real estate professional practicing in Englewood. You can reach him at 941-681-0312, or by email at firstname.lastname@example.org. See him on the web at www.danesellsflorida.com