About 48% of investors believe that the investment market is worse or much worse than it was a year ago, and 36% believe that conditions will remain the same over the next six months, according to the second RealtyTrac Investor Sentiment Survey.

Rising home prices (63%) have replaced lack of inventory (57%) as the No. 1 challenge cited by investors, although they trade places in the investor six-month outlook. Competition from traditional homebuyers (28%) fell out of the top three problems for investors and was replaced by increased material costs (36%).

“Real estate investors continue to face the dual challenges of low inventory and rising home prices,” said Rick Sharga, executive vice president at RealtyTrac, an ATTOM company. “Coupled with strong competition from traditional homebuyers and rising material and labor costs, it’s no wonder that individual investors believe that the market is less favorable today than it was a year ago.”

Still, many investors believe that ongoing competition from homebuyers will continue to be a challenge, and 27% said it will likely remain a top concern six months from now. 

The unprecedented demand from homebuyers has created an unusual market dynamic for individual investors: instead of competing with larger institutional investors, mom-and-pop investors find themselves competing with more traditional consumer homebuyers.

The investors who participated in the survey are representative of the majority of real estate investors—the typical mom-and-pop investors who purchase between 1-10 properties a year. 

It is these individual investors who exert the most influence on market conditions, the company said. While respondents to the previous RealtyTrac survey were almost evenly split between fix-and-flip and buy-and-hold investors, the respondents to the Fall 2021 investor sentiment survey included more investors who purchased properties for the purpose of renting them out.

“Investors are more optimistic about the future than they are about current market conditions,” Sharga noted. “But they do worry about inflation – about 81% of the investors surveyed were concerned about inflation causing material and labor costs to rise, making affordability an issue for prospective homebuyers and renters, and increasing the costs of financing.”

About 48% of investors believe that the investment market is worse or much worse than it was a year ago, and 36% believe that conditions will remain the same over the next six months, according to the second RealtyTrac Investor Sentiment Survey.

Rising home prices (63%) have replaced lack of inventory (57%) as the No. 1 challenge cited by investors, although they trade places in the investor six-month outlook. Competition from traditional homebuyers (28%) fell out of the top three problems for investors and was replaced by increased material costs (36%).

“Real estate investors continue to face the dual challenges of low inventory and rising home prices,” said Rick Sharga, executive vice president at RealtyTrac, an ATTOM company. “Coupled with strong competition from traditional homebuyers and rising material and labor costs, it’s no wonder that individual investors believe that the market is less favorable today than it was a year ago.”

Still, many investors believe that ongoing competition from homebuyers will continue to be a challenge, and 27% said it will likely remain a top concern six months from now. 

The unprecedented demand from homebuyers has created an unusual market dynamic for individual investors: instead of competing with larger institutional investors, mom-and-pop investors find themselves competing with more traditional consumer homebuyers.

The investors who participated in the survey are representative of the majority of real estate investors—the typical mom-and-pop investors who purchase between 1-10 properties a year. 

It is these individual investors who exert the most influence on market conditions, the company said. While respondents to the previous RealtyTrac survey were almost evenly split between fix-and-flip and buy-and-hold investors, the respondents to the Fall 2021 investor sentiment survey included more investors who purchased properties for the purpose of renting them out.

“Investors are more optimistic about the future than they are about current market conditions,” Sharga noted. “But they do worry about inflation – about 81% of the investors surveyed were concerned about inflation causing material and labor costs to rise, making affordability an issue for prospective homebuyers and renters, and increasing the costs of financing.”

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