Investor Central

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Monday, July 8, 2013

Thinking of Buying or Selling?

Here are the latest predictions on how rising mortgage rates may affect you as an investor.
From the article:
Institutional buyers are likely to slow the pace of their distress-sale home purchases if interest rates rise and other investments become more attractive. Whether they also dump the properties they have already purchased or hang onto them would depend on the demand for single-family-home rental properties. 
“I think the major equity players, like Blackstone (Group), that brought volume purchases to the real estate industry will retreat from the purchase of individual homes,” said Owen Beitsch, senior principal of Real Estate Research Consultants of Orlando. “This asset class is simply much too management-intensive, and the spread between cost and return is decreasing.” 
John Tuccillo, chief economist for Florida Realtors, said he expects the pace of investor purchases to slow “during the next year or so.” He added that, while he doesn’t expect equity funds to sell off their newly acquired houses, he figures they will cut back on picking up new ones. 
Diminished demand for investment houses would put pressure on prices to fall, though areas with low inventory would more easily handle an increase in available properties without prices tanking.
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Photography: STEVE MARCUS

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