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DS News Webcast: Friday 10/30/2015

In a nationwide survey of real estate investors bidding on single-family residential properties offered for auction during the third quarter of 2015, online real estate marketplace Auction.com found that flipping is still the preferred strategy over hold-to-rent. Largely due to a combination of increasing home prices and a lack of suitable inventory, flipping edged out renting as the preferred strategy in Q3 2015 for the fourth consecutive quarter. Overall in Q3, 53 point 7 percent of investors said they preferred flipping, while 45 point 1 percent said they intended to rent the properties the purchased.

Although overall more investors preferred flipping in Q3, the data showed that investor intent varied widely by the type of auction, live or online, and by investor profile. Investors who bought properties at live auctions were far more likely to flip, while most investors who purchased homes online said they intended to rent. Overall, 54 percent of investors who purchased online in Q3 preferred a hold-and-rent strategy compared to 43 point 3 percent who said they intended to fix and flip.

As was widely predicted, the nation’s real gross domestic product growth took a hit in the advance estimate for Q3 released Thursday following Q2’s healthy rate of 3 point 9 percent, according to the Bureau of Economic Analysis. In the first of three estimates for Q3, the GDP grew at an annual rate of just 1 point 5 percent, with the slowdown attributed to a downturn in private inventory investment. Economists expect housing fundamentals to remain strong for the rest of the year and into 2016 despite the weak GDP report.

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