Investors stepping up amid crunch in housing supply, affordability
The shift toward a buyers market provides investors with more room to negotiate, but many remain cautious amid rising labor and insurance cost concerns.
After dipping to a two-year low in the first quarter of 2025, real estate investor sentiment has rebounded, suggesting confidence in the market is growing, according to a new report from CJ Patrick Company and RCN Capital.
Despite an uptick during the second quarter, there are still many reasons for investors to remain cautious. Those surveyed for the report were largely mom-and-pop and small-scale investors — 71% of respondents said they own five or fewer properties, while 26% own six to 10 and just 4% own 11 or more.
Investors respond more positively to today’s market: According to CJ Patrick Company researchers, more investor respondents held positive views of the market during the spring of 2025 than in recent quarters.
Nearly half of respondents (49%) noted that market conditions improved from last year, while 26% signaled that conditions were about the same and another 25% said the situation had worsened. The report also found a jump in respondents who felt positive about the market’s potential over the next six months, with the share rising over 15 points to 49%.
The shift toward a buyers market helps: With a noticeable 30% improvement in inventory, a 53-day median time on market in June and more listings seeing price reductions, buyers have more leverage now than they’ve had in years. This also provides investors with a better environment for negotiations — particularly for flippers whose profit is often determined by what they originally paid for a project home.
Slowing immigration and mass deportation has an impact: When asked if the deportation of undocumented migrants has affected their business, nearly 45% of respondents said it’s been harder to find and keep skilled workers, while nearly 40% said this has led to an uptick in labor costs and over 1 in 10 (14%) have slowed their investment activity as a result. Just over 34% said deportation efforts had little to no impact.
Insurance costs, complexity also take a toll: A whopping 74% of respondents said rising costs and/or declining availability of insurance played a role in their investment decision-making during the second quarter — and for 56% of respondents, insurance problems caused them to miss out on at least one deal.
Majority of investors see a recession coming: While a greater share of investors felt more optimistic about market conditions, 57% said they think the U.S. is likely to enter a recession before the end of the year — a belief that 30% of respondents disagreed with, while another 13% were uncertain.