Sep 08

Is It Time for Real Estate Investors to Sell?

1. A Winning Streak—Now Facing a Pause

Over the past few years, real estate investors have enjoyed impressive gains:

  • Rental income has surged by 16.4% over three years, and 24.9% over five years.
  • Home prices have jumped 35.5% in three years, and 50.8% in five years.

Thanks to historically low financing costs, many investors have capitalized on these trends. But now, signs suggest the momentum may be slowing.

2. Shifting Market Conditions

  • Slowing rent growth: While rents are still rising in most areas, the rate of growth has slowed significantly.
  • Shoppers turning to new builds: Builders are constructing at a 40-year high, populating the market with new homes—particularly multifamily units.
  • Existing home inventory is low: At just 1 million listings, supply is at historic lows. To reach pre-pandemic levels would require a 50% increase, and a 100% increase is needed for a healthy balance.

3. Why Investors Matter Right Now

With few existing homes on the market, investors have a unique opportunity to sell:

  • High efficiency in sales: Properties are moving faster, with the median “days on market” dropping to 18 days in May—down from 22 in April, and still quicker than May 2022. Around 74% of homes sold in less than a month.
  • A call for policy support: The National Association of REALTORS® proposes offering temporary capital gains relief for investors who sell to first-time or first-generation buyers—a move designed to unlock inventory and assist those most in need.

4. What It Means for Investors

Here’s a clearer breakdown of your options:

ScenarioTypical Outcome
HoldRental income still rising—but at a slower pace.
Sell nowInventory shortages and fast sales may yield premium returns.
Wait and hopeMarket may cool, reducing your edge over time.

If you’ve held onto properties through strong appreciation and favorable financing, now could be your most profitable window to sell, particularly in markets where prices have dipped or stabilized.

In a Nutshell

You’ve had a stellar run—it’s prudent to consider whether now is the time to let go. With rent gains slowing, fresh construction drawing buyers, and low existing-home inventory putting pressure on prices, listing your property could pay off—especially when you could benefit from potential capital gains incentives for selling to first-time buyers.

Want to talk more about market trends or compare local data in your area? I’d be happy to help!

Source: REALTOR® Magazine
“Good Time for Investors to Unload’”
National Association of REALTORS®
Reprinted with permission

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