The Predictive Daily #122324

Author

Justin Beasley
December 23, 2024

MONDAY TREND
CoreLogic data shows that investor home purchases are near their post-pandemic low point

Investor purchases are sinking with the housing market at large

Real estate investors tend to be more insulated from market dynamics like higher mortgage rates, but they have bought fewer homes this year.

www.housingwire.com/articles/investor-home-sales-corelogic-september-2024

Investors Pump the Brakes

Are STR investors losing their edge? New data from CoreLogic highlights a fascinating trend: investor home purchases in September 2024 are hovering near post-pandemic lows, mirroring the overall slowdown in the real estate market. Let’s break it down!

From Boom to Balance: The Investor Shift

Back in June 2021, investors were riding high, snapping up homes at a record pace with 148,670 purchases in a single month. Fast forward to September 2024, and investor purchases dropped to 75,442—a 22.5% decline compared to September 2023. While it’s a modest recovery from the post-pandemic low, this slowdown suggests investors are exercising more caution.

What’s causing the pullback? Slower home price growth, the rise of mortgage rates, and a substantial increase in inventory. Even cash-flush investors are showing abnormal amounts of caution in the current investment environment. As CoreLogic’s economist Thomas Malone puts it, “Price growth is slowing down, so there’s less people in the market.”

What Does This Mean for Smoky Mountains STR Investors?

No panic allowed! A cooler investor market is something every investor should expect to encounter and you should be putting your self in as strong a cash position as possible.

Between the second and third quarters of 2024, Warren Buffett’s cash pile increased 17.4% to $325.2 billion

CNBC

Less competition among buyers means better deals for savvy STR investors. Smoky Mountains properties remain hot commodities thanks to high tourism demand, even as national markets take a breather.

If you’re playing the long game, this could be your moment to shine. With fewer investors jumping on properties, there’s more room to negotiate. Plus, as home price growth normalizes, rental yields in STR hotspots like the Smokies could become even more attractive.

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