The Trada Group, a national apartment development and management company, just released the results of a Real Estate Investor Survey conducted among prospective and current California real estate investors during March 2007. Overall the survey shows that real estate investors remain optimistic about the real estate market, with 82.1% planning to purchase investment property within a year. The results show that nearly one-third (32%) of investors are looking to purchase multifamily property in the future, a 68.4% increase over the 19% that currently own multifamily property.
Only 22.2% say they are looking for single-family property to purchase in the future, a 51.5% decrease in interest in single-family homes from the 45.8% of investors who currently own single-family investment property. The majority of California real estate investors (54.5%) are looking to purchase property in 24 states outside of California, a 29.4% increase over the 42.1% who currently own property outside of California. On the other hand, only 45.5% are looking for property in California, a 27.2% decrease compared to the 57.9% who currently own property in California.
“Investor demand for multifamily investment property outside of California has increased substantially,” said Rebecca Wood, vice president of marketing for The Trada Group, a company that builds and manages duplex and fourplex apartment communities outside of California for individual real estate investors. “We attribute this demand to a strong apartment rental market that has shown 15 straight quarters of increased consumer demand, according to the National Multi-Housing Council’s most recent quarterly survey. It is clear that Californians are becoming more sophisticated real estate investors and recognize there are many good rental markets in other areas around the country.”
The majority (73%) of investors say they are looking at properties priced less than $300,000, while 27% are looking for properties priced over $300,001. The median home price in California is currently $580,000 during March 2007, according to the California Association of Realtors.
Of those surveyed, 73.5% owned investment property, while 26.5% did not. Of the investors that own real estate investments, 42.1% own one or two properties; 18.5% own three to five properties; 8.4% own six to 10 properties; and 4.5% own more than 10 properties. Among those investors who own real estate investments, 45.8% own single-family properties; 19.9% own a condominium or a town home; 10% own a four-plex; 9% own a duplex and 9.5% have commercial property. The primary reason 35% of respondents say they invest in real estate is for a combination of appreciation, tax, benefits, income and diversification while 23.5% cite income only, 16.1% cite appreciation, 15.2% diversification and 10.1% the tax benefits.
“Investors know that real estate is a good investment that allows them to leverage their investment dollars and provides long-term income, appreciation and tax benefits,” said Wood. “There are many strong real estate markets around the country for investors. For those who already own property in California, they are more likely to purchase in another state to diversify their investment portfolios and mitigate their market risks.”
When asked when they were planning to purchase property, 29.1% are looking to invest within a year, 16.9% are looking to invest within 6 months, 22.7% within 90 days, 13.4% within 30 days, 7.6% are planning to wait more than a year and only 10.5% say they are undecided about investing. Other types of investments owned by survey respondents include 28.1% in mutual funds; 24.5% in stocks; 11.5% in real estate investment trusts, and 8.3% in bonds with 27.7% indicating they own some other types of investments.
According to those surveyed, 23.5% find investment opportunities online, while 17.6% use real estate agents; 11.8% use friends or referrals; 9.8% use a real estate investment club; only 4.4% use the newspaper and 32.8% use all these resources.
For a complete copy of the survey results, call 800-79-TRADA.
About The Trada Group
Based in San Francisco, The Trada Group (trada.com) is a 40-employee, $160 million real estate development, investment and management company committed to providing individual real estate investors with pre-construction, multifamily investments in up-and-coming markets throughout the United States. The company has 17 apartment complexes completed or under development in Idaho, Missouri, New Mexico, Texas and Washington.
In 2005, The Trada Group established The Trada Foundation that awards grants for organizations in communities in which it builds.