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RealtyTrac: Institutional investor activity declines across country

Posted on Thursday, May 8, 2014 at 9:18:59 AM

Historically, many homebuyers interested in affordable residential financing have been able to find a high number of listings without worry. However, since the Great Recession, there has been an increase in large investor groups snatching up numerous properties and reducing the inventory.

However, this trend has shifted, according to new information from RealtyTrac. Those institutional investors have started to disappear, instead replaced with retail investors and regular homebuyers. Even so, the amount of all-cash sales has been on the rise, up to 42.7 percent in the first quarter of 2014, compared to 37.8 percent at the end of 2013.

Daren Blomquist, vice president at RealtyTrac, stated that tight lending standards and low inventory help investors and cash buyers.

"The good news is that as institutional investors pull back their purchasing in many markets across the country, there is still strong demand from other cash buyers - including individual investors, second-home buyers and even owner-occupant buyers - to fill the vacuum of demand left by institutional investors," he added.

In some parts of the country, investor activity has noticeably declined, according to Bloomberg Businessweek. Jim Belfiore, president of Belfiore Real Estate Consulting, told the media outlet that investor momentum is gone in Arizona, where his business is located.