No End in Sight for the Housing Shortage, New Western Investor Survey Finds
Due to the lack of inventory, 80 percent of surveyed investors are selling homes at or above asking price New Western, the largest national private real estate investment marketplace, released a survey and report on single family real estate investor sentiment in the United States and the company’s top growing markets right now. Approximately 60 percent of survey respondents believe the U.S. is in a housing shortage. As a result, 80 percent of the surveyed investors are selling homes at or above asking price after renovating the properties to make them habitable. From Q1 2023 to Q2 2023, New Western saw double digit growth in over a dozen markets, including: Other notable markets that grew from Q1 2023 to Q2 2023 are Atlanta and Dallas. As New Western investor activity grew across these markets, the retail market saw a decrease of 40 percent or more according to Redfin data, showcasing how investors are bullish on finding opportunities despite negative market sentiment. Approximately 55 percent of survey respondents said location/neighborhood is most important to their buyers. As consumers look to find more housing options, investors are delivering much needed supply back to the market. On average, homes purchased through New Western that are later renovated sell for 31 percent less than new traditional homes for sale in the same market. “Investor sentiment is positive right now as they haven’t let the macroeconomic environment slow them down,” said Kurt Carlton, co-founder and president of New Western. “The U.S. is lacking about 320,000 listings valued at the affordable range for middle-income buyers. These investors see the housing shortage as an opportunity to deliver homes for buyers where the payoff is larger than the profits.” The National Association of Homebuilders projects the construction of 830,000 homes this year, but what goes unnoticed is the expected 350,000 home flips involving vacant and uninhabitable properties revitalized by independent rehabbers. These rehabbers are stepping in to address scalability challenges and fill the gaps in individual markets, driven by demand. For the remainder of 2023, investors are confident in the residential real estate market; about 70 percent of respondents plan to invest in one to three properties and 75 percent saw business growth from the second half of 2022 to date. “Clearly, the survey shows that the housing dynamics have changed in the mind of some investors. New listing data is trending at all-time lows; active inventory growth has been so slow in 2023 that we will see some negative year-over-year prints soon in the weekly inventory data. Also, housing demand stabilized from its waterfall collapse in 2022. In this environment, the opportunity to fill in the need due to the housing shortage is being tackled by investors. Also, this is all happening with higher rates; if rates fall in this environment, demand has nowhere to go but up from such low levels,” said Logan Mohtashami, housing data analyst and financial writer at HousingWire. The survey and report, titled “The Flip Side 2.0: An Outlook for Residential Real Estate Investing in 2023,” is an analysis from insight based on both New Western sales data as well as opinion polling in May and June 2023 from over 1,350 of its real estate investors ages 18 and up from around the U.S. who have previously purchased property through New Western or plan to in the future. A majority of the survey respondents are ages 26 to 57. Specifically, around 30 percent are ages 26 to 41, just over 40 percent are ages 42 to 57 and approximately 15 percent of respondents are 58 to 67. A little over 70 percent of respondents invest in the Southwest and Southeast regions of the U.S. Additionally, roughly 70 percent of respondents fund their investments through hard money or investment financing and about 30 percent through cash. For more information about New Western, please visit https://www.newwestern.com. About New Western New Western is a real estate investment marketplace that makes investing more accessible for more people. Operating in most major cities, our marketplace connects more than 150,000 local investors looking to rehab houses with sellers. As the largest private source of investment properties in the nation, we buy a home every 13 minutes. New Western delivers new opportunity for all—a fresh start for sellers, exclusive inventory for investors, and in doing so, creates housing that is more affordable for buyers. New Western was honored with a Glassdoor Employees’ Choice Award in the U.S. small and medium company category, recognizing the Best Places to Work in 2023.
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