Real Estate Investing Statistics – Facts You Should Know
Getting into the real estate market is a valuable way to diversify your investments. It’s also possible to use this market to supplement or even replace income earned from a regular full-time job. To make informed decisions when evaluating a property, you should understand the market and have real estate data.
Using real estate investing statistics, you can identify and make predictions on the neighborhoods, properties, and features. For budding real estate investors, we’ll share interesting real estate facts that’ll show you what statistics to find when evaluating properties.
About Real Estate Investing
Investing in real estate is the purchase, management, and sale/rental of properties. There are also other ways to get into the real estate market that don’t involve physical properties. Real estate has been a popular investment vehicle for more than 50 years. You can get into the real estate business in several ways, including:
- Rental Properties – You can buy properties and rent them out to tenants, becoming a landlord. You’re responsible for finding tenants, dealing with any property issues, paying the mortgage, and maintaining the property. Alternatively, you can hire a property manager to handle the day-to-day operations.
- Flip houses – Flippers will buy existing homes and only intend to hold them for a short period before selling them for a profit. There are two main approaches to flipping a property. The first is buying property like single-family homes and making repairs/updates to increase the value of the home. The other is the hold and resell approach, where you buy a property in a fast-rising market and sell it for a profit after a few months.
- REITs – Real estate investment trusts are corporations that use investors’ money to buy, operate, and sell income-producing properties. REITs are available on major exchanges where you buy/sell them like stocks.
- Real estate investment groups – REIGs work similar to mutual funds, except with real estate. The company buys or builds properties, typically apartments, and allows investors to buy them through the company.
Investing in real estate is an attractive option for many individual real estate investors. The real estate industry offers solid risk-adjusted returns. Generally speaking, the real estate market experiences lower volatility than other investments like bonds.
Real Estate Investing Statistics – Highlights
- Homes that sell the fastest and for the highest price are listed between April 10 to 16
- Rentals for 1 & 2 bedrooms are up 24.4% & 21.8%
- Before contacting an agent, 43% of home buyers search online
- Short term rental market is expected to grow 5.3% over the next 8 years
- 50% of investors are opting to invest in real estate over the stock market
- 72.5% of rental properties in the United States are owned by individual real estate investors
- 4 amenities that drive rentals and ROI on rentals are smart technology, pet accommodations, privacy, and accessibility
- $357,300 is the median home price in 2022
- 38 days is the average number of days houses are in the market
- Spending on remodeling and repairs is expected to reach $400 billion by Q3 2022
Homes that sell the fastest and for the highest price are listed between April 10 to 16
In the real estate housing market, there are good and bad times to list your home. If you’re interested in flipping homes, this stat is important to consider when you’re making a timeline for renovating or holding a home to sell for a profit.
You’ll get the most exposure for the property, and it will sell faster. Additionally, since housing prices are higher during this time, you’ll likely enjoy a greater return on your investment.
Rentals for 1 & 2 bedrooms are up 24.4% & 21.8%
The average rent price across the U.S. has increased significantly year over year, according to data from Rent.com. The most competitive rental markets are on the coasts, like Long Beach, CA, and Jersey City, NY. It’s a seller market for buying homes, and many people interested in buying a house are priced out of the market.
Since people must live somewhere, they’re renting homes or apartments. For landlords, in highly competitive areas, you could charge higher monthly rent.
Before contacting an agent, 43% of home buyers search online
(National Association of Realtors)
Working with a professional real estate agent is the way that many buyers believe will help them find a home. But real estate statistics from the National Association of Realtors (NAR) show that many people look online for a new home, before finding an agent to show them the property. Only 18% of buyers talk to real estate agents first. What this means for your real estate investments is that you’ll need a strong digital marketing strategy to help find buyers.
Short term rental market is expected to grow 5.3% over the next 8 years
The millennial generation is especially driving this rise in spending on travel, vacations, and accommodations. Real estate trends in this direction are growing due to more interest in vacationers opting for vacation rental properties that offer more privacy, low cost, and kid and pet-friendly accommodations. Real estate investments into vacation homes are an opportunity for investors to consider due to this growing demand.
50% of investors are opting to invest in real estate over the stock market
About 2/3 of Americans were investing in the stock market back in 2007. About half of investors are looking at real estate investments. The reason for this interest in the real estate market? Millennials are among the biggest groups that invest. During the 2008 economic downturn, many Millennials had a tough time getting jobs.
They also witnessed the stock market fall significantly. Although the housing market crash was one of the factors in its fall, Millennials became more skeptical about investing in the stock market.
72.5% of rental properties in the United States are owned by individual real estate investors
From the Pew Research Center, the majority of rental housing units aren’t owned by a group of big corporations. These individuals primarily own between 1 to 4 units.
4 amenities that drive rentals and ROI on rentals are smart technology, pet accommodations, privacy, and accessibility
To make the most of that rental property, consider including the features that renters will pay more to get. Rentals.com lists among these top features as having smart technology that includes access to everything from high-speed internet to smart thermostats. Many tenants have trouble finding rentals that allow four-legged companions, which leaves a potential market for possible renters and also increases the rental cost.
Privacy is a big concern for those living in townhomes and condos. So ensuring that your two-bedroom apartments are built build with good soundproofing material is a good start. If you’re looking for existing homes to buy or building new housing units, make sure to consider how accessible they are. For example, if you’re looking to accommodate elderly tenants, properties shouldn’t have a ton of stairs that they must climb to get around their homes.
$357,300 is the median home price in 2022
Median house prices are much higher than they were in the previous year. Real estate statistics from Realtor.com indicate that the median home price rose by $46.700 over 2021. Housing prices are an important factor when considering getting into real estate investing. Whether you’re looking to rent housing units or flip existing homes, the higher the cost of acquiring a property, the less you’ll have for other activities.
38 days is the average number of days houses are in the market
Existing home sales are happening very fast as of March of 2022. Investors and flippers don’t want to have their property listings out there for too long. Luckily it is a seller’s market, and home buyers are grabbing up properties in less than 45 days on average.
Spending on remodeling and repairs is expected to reach $400 billion by Q3
(Joint Center of Housing Studies of Harvard University)
The Joint Center of Housing Studies of Harvard University released real estate statistics that indicate that remodeling and repairs will increase year-over-year in 2022.
These costs are big factors when it comes to managing a property as an owner or investor.