Entering the real estate market offers a valuable way to diversify your investment portfolio. It can also supplement or even replace income from traditional employment. To make informed decisions when evaluating properties, you need to understand market dynamics and have access to reliable real estate data.
Through real estate investing statistics, you can identify trends and make informed predictions about neighborhoods, properties, and valuable features. For aspiring real estate investors, we’ll share compelling statistics that reveal what data to examine when evaluating potential investments.
About Real Estate Investing
Investing in real estate involves the purchase, management, and sale or rental of properties. There are also alternative ways to enter the real estate market without owning physical properties. Real estate has remained a popular investment vehicle for over five decades. You can enter the real estate business through several approaches, including:
- Rental Properties – You can purchase properties and rent them out to tenants, becoming a landlord. You’re responsible for tenant acquisition, property maintenance, mortgage payments, and addressing issues. Alternatively, you can hire a property manager to handle day-to-day operations.
- Flip houses – Flippers purchase existing homes with the intention of holding them briefly before selling for a profit. There are two main approaches: buying properties like single-family homes and making repairs/updates to increase value, or the hold-and-resell approach, where you purchase property in rapidly appreciating markets and sell for profit within months.
- REITs – Real estate investment trusts are corporations that use investor capital to buy, operate, and sell income-producing properties. REITs trade on major exchanges where you can buy and sell them like stocks.
- Real estate investment groups – REIGs function similarly to mutual funds, but focus on real estate. The company purchases or builds properties, typically apartments, allowing investors to buy them through the company.
Real estate investing appeals to many individual investors because the industry delivers solid risk-adjusted returns. Generally, the real estate market experiences less volatility than other investments like bonds.
Real Estate Investing Statistics – Highlights
- Homes that sell fastest and for top dollar are listed between April 10-16
- 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 choose real estate over the stock market
- 72.5% of rental properties in the United States are owned by individual investors
- 4 amenities that drive rentals and ROI are smart technology, pet accommodations, privacy, and accessibility
- $357,300 is the median home price in 2022
- 38 days is the average time houses spend on 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 housing market, timing your listing can significantly impact results. For house flippers, this statistic proves crucial when creating timelines for renovations or determining optimal hold periods before selling for profit.
You’ll maximize property exposure and accelerate sales. Moreover, since housing prices peak during this period, you’ll likely achieve higher returns on your investment.
Rentals for 1 & 2 bedrooms are up 24.4% & 21.8%
(Rent.com)
Average rent prices across the U.S. have surged significantly year-over-year, according to Rent.com data. The most competitive rental markets concentrate along the coasts, including Long Beach, CA, and Jersey City, NY. With a seller’s market pricing many prospective buyers out, demand for rentals has intensified.
Since housing remains essential, displaced buyers turn to rentals. For landlords in competitive markets, this creates opportunities to command premium monthly rents.
Before contacting an agent, 43% of home buyers search online
(National Association of Realtors)
While many buyers ultimately work with professional real estate agents, National Association of Realtors (NAR) data reveals that most begin their search online before engaging an agent to show properties. Only 18% contact agents first. This means successful real estate investments require robust digital marketing strategies to connect with potential buyers.
Short term rental market is expected to grow 5.3% over the next 8 years
Millennials are particularly driving increased spending on travel, vacations, and accommodations. This growth stems from vacationers preferring rental properties that offer enhanced privacy, cost savings, and accommodations for families and pets. Vacation home investments present compelling opportunities for investors capitalizing on this expanding demand.
50% of investors are opting to invest in real estate over the stock market
While about two-thirds of Americans invested in the stock market in 2007, approximately half now favor real estate investments. This shift toward real estate stems largely from millennial investors who experienced the 2008 economic downturn firsthand.
Many millennials faced employment challenges during this period and witnessed significant stock market declines. Although the housing crash contributed to the recession, millennials developed greater skepticism toward stock market investing.
72.5% of rental properties in the United States are owned by individual real estate investors
According to the Pew Research Center, most rental housing units aren’t controlled by large corporations. Individual investors primarily own between 1-4 units each.
4 amenities that drive rentals and ROI on rentals are smart technology, pet accommodations, privacy, and accessibility
To maximize rental property returns, consider incorporating features tenants will pay premiums for. Rentals.com identifies smart technology—including high-speed internet and smart thermostats—as a top amenity. Many tenants struggle finding pet-friendly rentals, creating market opportunities and justifying higher rents.
Privacy concerns plague townhome and condo residents, making quality soundproofing essential. When purchasing existing properties or developing new units, prioritize accessibility. For instance, properties targeting elderly tenants should minimize stairs and navigation challenges.
$357,300 is the median home price in 2022
Median home prices have climbed substantially from the previous year. Realtor.com data shows the median price increased by $46,700 over 2021. Housing costs are crucial factors when entering real estate investing. Whether pursuing rental properties or house flipping, higher acquisition costs reduce capital available for improvements and other activities.
38 days is the average number of days houses are in the market
Home sales are moving rapidly as of March 2022. Investors and flippers prefer avoiding prolonged market exposure. Fortunately, the current seller’s market means buyers are securing properties in under 45 days on average.
Spending on remodeling and repairs is expected to reach $400 billion by Q3
2022
(Joint Center of Housing Studies of Harvard University)
The Joint Center of Housing Studies of Harvard University reports that remodeling and repair spending will continue growing year-over-year in 2022.
These expenses represent significant considerations for property owners and investors managing their investments.
