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Investors Laying Off High Volume Purchases

Investors have placed high bets on housing in recent years, buying up distressed homes in bulk. Now it may be the time to see if these investments will pay off.

Investors have been less involved the market as of late due to rising home prices and a more limited inventory of distressed homes for sale. Investors made up roughly 16 percent of homebuyers in June, a fall from 22 percent in February, according to the National Association of REALTORS(R). Rather than continuing to buy up properties, investors are now focusing on ensuring the houses they have snatched up are profitable and occupied by renters, CNBC reports.

"What you're seeing in housing overall is a bit of a pause as the market digests what's happening," says Colony Capital’s Justin Chang. "We are in the early days of a long recovery."

Aaron Edelheit of The American Home, which currently owns 2,500 single-family rental homes nationwide, says that rental demand is high and management appears to be working. Still, he foresees consolidation in the future, with some larger investment firms that have stronger management structures buying up the smaller investment players. Smaller investors may be more likely to move on, having “exhausted their cash and their credit opportunities,” CNBC notes.

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Tags:- real estate news   investors   distressed homes   Home Prices   mortgage rates