Lack of investors could provide boost for homebuyers
Posted on Wednesday, February 12, 2014 at 9:39:19 AM
For any housing market, tight inventory and too much competition could create uncomfortable circumstances for homebuyers interested in affordable residential financing.
One common cause behind these factors is often large-scale real estate investors, or professionals who buy in bulk and then rent out at a later date, according to Zillow. However, it appears that this element is leaving the housing market, which could mean better conditions and smoother forecasts for regular buyers.
Zillow surveyed 110 economists, real estate experts and strategists, and a majority of respondents supported this claim. In addition, these professionals believe that the shift will be substantial, with 79 percent noting that investors leaving the market would have a significant or somewhat significant impact.
"Real estate investors, both large and small, played a crucial role in helping to stabilize markets during the darkest days of the housing recession, but a decline in investor activity now isn't necessarily a bad thing, and could have real benefits for buyers," said Stan Humphries, chief economist at Zillow.
This change could come at a good time as well. According to Bloomberg, consumer confidence in the housing market has been declining in recent months. The organization's Consumer Comfort Index dropped in January, rivaling low numbers last experienced several months prior.