All-Cash Investment Home Prices Skyrocket 21.2 Percent in August
Single-family rental (SFR) investors and homebuyers are benefiting from low interest rates.
IRVINE, Calif., Sept. 22, 2016 /PRNewswire/ -- HomeUnion, an online real estate investment management firm, has released August 2016 data showing that median sales prices for all types of residential real estate are soaring. According to the monthly HomeUnion Home Sales Report, prices for investment houses and owner-occupied homes increased 12.6 percent from one year ago to $266,500. The all-cash segment of the SFR sector also grew dramatically: then median sales price soared 21.2 percent to $186,500 in August year-over-year.
"Anyone taking out a mortgage, including SFR investors, will be able to leverage properties at historically low rates," explains Steve Hovland, director of research for HomeUnion. "Mortgages on those assets, meanwhile, can be covered by rising rents. This explains both the recent surge in activity among investors acquiring SFRs and last month's continued price growth for owner-occupied housing."
Below is a complete breakdown of August housing market conditions:
| August National Home Price Trends |
|||
| Data |
Year-Over-Year |
||
| Total Median Sales Price |
$266,500 |
12.60% |
|
| Owner-Occupied Sales Price |
$281,800 |
9.70% |
|
| Investment Median Sales Price |
$225,800 |
17.10% |
|
| Average Investment Cap Rate |
5.30% |
-70 |
Basis Points |
| Investment Median Cash Price |
$186,500 |
21.20% |
|
| Average Cash Cap Rate |
6.00% |
-110 |
Basis Points |
| Investment Median Leveraged Price |
$261,900 |
12.02% |
|
| Average Cap Rate |
4.40% |
-78 |
Basis Points |
| Source: HomeUnion Research Services Disclaimer: Median sales price non-seasonally adjusted and based on transactions above $30,000. |
||||
"Since a move from the Fed is unlikely until the December meeting, we expect investors to expand their portfolios further through the end of 2016 as the competition prevalent in the summer buying season fades," Hovland adds. "However, lenders will begin lifting rates well in advance of the December Fed meeting, so we expect interest rates to inch higher through year end."
About HomeUnion
HomeUnion is an online real estate investment management firm. Based in Irvine, Calif., it provides all the services needed for individuals to invest remotely in single-family rental (SFR) properties. The company uses a combination of research and data-driven proprietary analytics to incorporate over 110 million homes and 200,000 neighborhoods into their database, and then delivers its solutions to an on-the-ground infrastructure that currently serves 20 locations. HomeUnion's role spans the lifecycle of the investment transaction: identifying sound investments, handling all aspects of acquisition, maximizing income, protecting asset value, and selling the asset when the time comes.
SOURCE HomeUnion
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