While distressed housing conditions may seem like the perfect storm for investors to cash in on a buyer's market, a new report from the ""National Association of Realtors"":http://www.realtor.org (NAR) reveals that the percentage of home sales last year falling into the category of ""residential investment property"" was down significantly.[IMAGE]
Based on ""NAR's study"":http://www.realtor.org/wps/wcm/connect/d4d0e88041f30d12a79cf788f8e9afed/2010%2BNAR%2BInvestment%2Band%2BVacation%2BHome%2BBuyers%2BSurvey%2BReport.pdf?MOD=AJPERES&CACHEID=d4d0e88041f30d12a79cf788f8e9afed, investment-home sales dropped 15.9 percent to 940,000 in 2009, down from 1.12 million in 2008. On the other hand, primary residence sales rose 7.1 percent to 4.04 million in 2009, compared to 3.77 million in 2008.[COLUMN_BREAK]
The median investment property sold for $105,000 last year, down 2.8 percent from $108,000 in 2008, NAR reported.
The market share of homes purchased for investment was 17 percent last year, down from 21 percent in 2008. There were more investment sales in the West in 2009, NAR says, consistent with reports in California of a high share of all-cash purchases, notably in lower price ranges.
According to NAR's analysis, the distribution of investment sales was fairly close to the distribution of population: 35 percent in the South, 25 percent in the West, 24 percent in the Midwest, and 16 percent in the Northeast.
Similar to 2008, cash played a strong factor in the market last year, with half of investment buyers purchasing will all cash. And roughly one in four investment buyers purchased more than one property in 2009.
Investors indicated that portfolio diversification or good investment opportunities were factors in their purchase decisions.
NAR's analysis of U.S. Census Bureau data shows there are 41.1 million investment homes in the country, compared with 75.0 million owner-occupied homes.