Meanwhile, investment home prices rose 8.5% in March
IRVINE, Calif., April 27, 2016 – HomeUnion, an online real estate investment management firm and data provider enabling value investing in residential properties, has released March 2016 data on the flattening U.S. housing market. According to HomeUnion’s research, the median price for owner-occupied homes declined 1.1% to $234,300. Meanwhile, the median price for non-owner-occupied homes, or investment homes, rose 8.5% to $192,600.
“We are seeing a degree of volatility in the traditional housing market, especially on a regional level,” says Steve Hovland, director of research for HomeUnion. “We expect price growth for owner-occupied homes to be tempered, even as we enter the typically frenzied spring home-buying season. Housing affordability has pushed beyond incomes in many areas of the country, limiting demand at today’s prices despite low interest rates.
“March home price figures highlight the attractiveness of single-family rental (SFR) investment homes in an uncertain environment,” Hovland notes. “Since last August when volatility set into the global stock markets, investors have been repositioning their portfolios to hedge against uncertainty and find stable yields. We’re seeing that demand translates into higher investment home prices.
“At this stage in the cycle, purchasing a fully managed investment home or portfolio of homes remotely could prove to be a better long-term investment than purchasing a home to occupy, depending on where that investment home is located,” he adds.
Here are more details on how investment home prices compare to traditional home prices:
|Median Sales Price for All Housing||$223,400||4.3%|
|Owner-Occupied Median Sales Price||$234,300||-1.1%|
|Investment Median Sales Price||$192,600||8.5%|
|Investment Home Cap Rate||5.8%||-80 basis points|
|Investment Home All-Cash Price||$156,500||5.5%|
|Home Cash Cap Rate||6.4%||-120 basis points|
|Investment Home Leveraged Price||$224,900||0.2%|
|Leveraged Home Cap Rate||4.8%||-50 basis points|
Median sales price is based on transactions of single-family homes available through FHA financing (up to four units). Transactions above $30,000 were considered in the analysis.
HomeUnion is an online real estate investment management firm, bringing value investing to the individual investor in residential properties. Based in Irvine, Calif., it provides all the services needed for individuals to invest remotely in SFR properties. The company uses a combination of data-driven proprietary analytics to incorporate over 120M homes and 200,000 neighborhoods into their database, and then delivers its solutions to an on-the-ground infrastructure that currently serves 21 locations. HomeUnion’s role spans the lifecycle of the investment transaction: from identifying sound investments; handling all aspects of acquisition; maximizing income; protecting asset value; and selling it when the time comes.