Greater Increases on Investment Property Prices

Home prices on investment properties increased at a greater pace than owner-occupied houses, according to new data released by HomeUnion, an Irvine, Calif.-based online real estate investment management firm.

During February, median investment home prices increased 5.1 percent on a year-over-year basis, where owner-occupied home prices upticked by a relatively modest 1.1 percent. Still, the median price for owner-occupied homes ($236,900) remained greater than the median price for investment homes ($185,500).

“Traditional home prices have peaked in light of stagnant wage growth and a lack of lower-priced properties available on the market,” said Steve Hovland, manager, research services at HomeUnion. “Nearly all of the increase in investment home prices was in the cash sector, where there’s still significant demand. February’s home price figures highlight the attractiveness of single-family rentals in an uncertain environment. Since last August, when weakness in the global stock markets began to erase equity, investors have been re-positioning their portfolios to hedge against uncertainty. We’re seeing the results in higher investment home prices, particularly in the all-cash segment.”