All-Cash Investment Home Prices Shot Up 33 Percent in September

The housing sector saw its 55th month of growth since the beginning of 2012.
IRVINE, Calif., Oct. 19, 2016 – HomeUnion, a leading real estate firm that provides all the services investors need to buy, sell and manage real estate online, has released September 2016 data showing that median sales prices for investment housing and owner-occupied housing continue to accelerate. According to the monthly HomeUnion Home Sales Report, median prices increased 17 percent year-over-year to $269,300, the 55th month of year-over-year growth in the residential real estate sector since 2012. All-cash buyers pushed prices up nearly 33 percent in September to $211,400. In addition, average cap rates for both financed and non-leveraged single-family rentals (SFRs) dropped 90 basis points to 5.2 percent.

Median prices for rental properties in markets hit the hardest by the recession completely bottomed out in 2012, and little inventory remains in the sub-$150,000 range across several metros nationwide. “With a paucity of lower-priced inventory, SFR investors have started to target higher-priced assets,” explains Steve Hovland, director of research for HomeUnion. “The elevated price of all-cash sales is indicative of investors’ uneasiness with lower-risk, dividend-yielding assets. More buyers are willing to lock in returns over the next five to seven years because they doubt the Fed’s forthcoming monetary policy will greatly benefit them. Investors are frustrated by sitting on cash, and each passing meeting with inaction from the Fed casts further doubt about how much fixed-income investments will improve over the short term. Therefore, the attractiveness of SFRs is getting amplified.”

Below is a complete breakdown of national home prices trends in September:

September National Home Price Trends
Data Year-Over-Year
Total Median Sales Price $269,300 17.0%
Owner-Occupied Sales Price $286,900 15.8%
Investment Median Sales Price $238,800 17.1%
Average Investment Cap Rate 5.2% -90 Basis Points
Investment Median Cash Price $211,400 32.8%
Average Cash Cap Rate 5.5% -160 Basis Points
Investment Median Leveraged Price $261,900 12.0%
Average Cap Rate 5.1% -70 Basis Points

 

Source: HomeUnion Research Services    Disclaimer: Median sales prices are non-seasonally adjusted and based on transactions of single-family homes above $30,000.

For more information, download the full report.

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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 18 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.

Media Contact:
Stacey Corso

Communications Manager, HomeUnion
stacey.corso@homeunion.com
415.672.6460

 

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Ugly But Honest News 10-20-2016 Oct 20 2016 - 11:11 AM
[…] Things Are Tough All Over:  All-Cash Investment Home Prices Shot Up 33% in September […]

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