DS News

90 90 INVESTMENT GOVERNMENT PROPERTY PRESERVATION Journal INVESTOR SENTIMENTS PREDICT TIGHT INVENTORY, INFLATION INTO 2022 e latest edition of the RealtyTrac Investor Sentiment Survey has confirmed something many investors already knew: the real estate market is in a worse place than it was a year ago. e survey by RealtyTrac, a property information company, found that 49% of a panel of real estate investors believed that the market is worse or much worse than it was a year ago. irty percent responded that the market investment was in about the same shape as it was a year ago, but when looking to the future, 43% of respondents predict that the market will be in about the same shape as it is now in six months while 31% predict the market will be in a worse place. In addition, a majority of respondents (63%) believe that the lack of available inventory is having the biggest impact on the current market followed by rising home prices (60%). "Similar to our last two surveys, the problems of low inventory and rising home prices are those most often cited by individual investors across the country," said Rick Sharga, EVP at RealtyTrac, an ATTOM company. "Together with supply chain disruptions which have caused product shortages and increased material costs, it is not surprising that individual investors think that the market is not as healthy today as it was a year ago." Investors do not predict to see much of a change in the next six months either; the lack of inventory (57%) along with rising home prices (46%) will remain the foremost obstacles for investors during this time period. is is followed by problems with increased materials costs (35%) and rising interest rates (34%). Inflation was also cited as a major concern among investors. In the most recent meeting of the Federal Reserve's Open Market Committee, Chairman Jerome Powell said that the recent rise in inflation is not as transitory as they originally thought, a comment which worried investors. irty-nine percent of respondents deemed inflation as a significant concern due to its effects on labor and raw materials, which makes it harder to turn a profit. Meanwhile, 30% of respondents believe that more inflation can lead to higher mortgage rates that hurt affordability and weaken demand. "A looming concern is that of inflation," Sharga noted. "About 88% of the investors surveyed were concerned about inflation having an impact on their business, whether that was due to higher material and labor costs, higher interest rates, or rising consumer prices that might weaken demand from potential home buyers and renters." Additionally, 43% of investors think that foreclosure activity will rise to higher than normal rates, but stay below the level seen during the Great Recession. About 54% of respondents planned to buy and rent properties, while only 34% identified themselves as fix-and-flip investors.

• Cover