Rising home prices are blocking some investors from home purchases, while others are exploring new markets with better bargaining power. A worthy investment, offer not just solid appreciation potential, but also a lucrative rental returns for a long term.

Soaring prices

According to recent development in real estate blog home prices rose upto to 12.2 percent. Home prices in Riverside, are over 22 percent, and in Atlanta they are up nearly 17 percent, both including sales of distressed homes.
The underlying economy of US is doing well with a consistent increase in jobs enabling people to spend on rent leading to a strong rental demand in areas of Alaska, Philadelphia etc. Interesting is the fact that some of these demands are coming from those who lost their homes to foreclosure and may be seeking single-family rentals.

Renting over Purchase
The national vacancy rate for apartments decreased from 8 percent to 4.1 percent from 2009 to 2013, At the same time, the average price of an existing U.S. House has risen about 14 percent, according to commercial real estate data provided by Reis Inc. to a newspaper report. People are discouraged to invest in Houses as a effect of housing market disaster of 2007. A burden of foreclosures forced many people to move out of their homes and into apartment leases. On the other side, construction of apartments was uphold until the last few years because many builders couldn't get loans during the credit crisis.In certain places, this led to lease and a rise in rents. This was seen as opportunity for the landlords to increase rents in many markets.

Scalability
A real estate blogger said that Large scale properties investors had put a hold on big mouth purchase.Much of that is due to price appreciation and lack of distressed supply; perhaps less is due to investor demand. All-cash sales, which are largely by investors, still make up a historically high 35-40 percent of home sales today, according to several different surveys. The worst markets for investors are High-cost areas with limited distress like New York, northern New Jersey, Seattle, San Francisco etc. yielding just 3 percent annual gross returns. Rental demand and prices there are very high, but home prices still don't make it worth an investor's while.


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