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August 30th, 2010 9:22 AM by David W. Welch
I posted in my Orlando real estate blog earlier this month about an article regarding house sizes. It was prompted by an article I read on Yahoo quoting a survey conducted by Trulia. The folks at Trulia liked that I liked it on my Facebook page. One of the questions that I had about the numbers is what effect investors have on mix of smaller vs larger homes. I expected they would be buying up smaller homes, because they could probably get a better return on their investment. I think my reasoning was pretty sound from the information I found when I pulled out the investors. By the way, I define investors by looking at cash deals. I recognize that is not perfect, but expect it is probably a pretty good proxy.
All Sold 6mo 2010
No Investors Sold 6mo 2010
I added the last two columns to the table above to show the purchases of homes by "non-investors" for the first six months of this year. The first thing you notice is the investors accounted for the vast majority of the smallest two size categories. Many of these account for condo sales in our market. In the original article a survey by Trulia found only 9% of people wanted a home over 3,200 square feet while a third were looking for a home under 2,000. Our market sales seem to illustrate a similar trend. The inventory of those larger homes about 13.6% of the total inventory, which is about 2.75 times what it should be. Way over a third are buying homes under 2,000 square feet though. Here in Orlando it is over 60% of the number of sales transactions. I don't know if the McMansion is dead, but it appears overstocked right now. Without the investor purchases all the size categories are overstocked.
David Welch Real Estate Optimist, Orlando Real Estate