Experts have indicated Canada will need to build millions more homes in the next 10 years to meet our growing needs. To the casual observer the problem is easy to solve: just build more homes. For those in the real estate development field, the problem is much more complicated than this.
Real estate investors have shown increased interest in the US housing market in 2018.
The share of US home sales to investors reached 11.3%, beating 2017’s 11% and becoming the largest share since CoreLogic began tracking the metric in 1999.
Investor interest has been driven by strong growth in the US rental market along with fix-and-flip opportunities which have been popularized by real estate investment TV shows.
The report shows that the increased investor participation is mainly smaller investors rather than the institutional giants that were active following the housing crash.
Starter homes have been a focus for their affordability and attractiveness on the rental market although tight inventory remains an issue for investors wishing to enter this part of the market.
“So-called ‘mom-and-pop’ investors grew from 48% of all investor-purchased homes in 2013 to more than 60% in 2018,” CoreLogic said in the report. “Large investors – those who purchased more than 101 homes – nearly doubled their activity between 2000 and 2013 but have pulled back since the foreclosure crisis and now sit at 15.8% of purchases.”
Detroit was the top market for investor participation with a 27% share, followed by Philadelphia (23.3%), and Memphis (19.7%).
While there has been a deceleration in new home sales, we must keep the pedal to the metal and continue to train skilled trades workers for the future.
Many jurisdictions in the U.S. have been thinking outside the box to boost the housing supply. Here in Ontario, we’d be wise to follow suit.
This free summit will feature top experts in Canadian real estate who will share their knowledge on a broad range of topics. It will be presented on Sat. Jun. 18th from 12pm-3pm.
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