R
eal estate investor sentiment has hit a one-year low, according to the Winter 2024 RCN Capital/CJ Patrick Company Investor Sentiment Index. The index score dropped from 124 in the Fall to 97 in the Winter, with three of the four metrics showing quarter-over-quarter declines. Investors are less optimistic about current market conditions, with only 35% viewing today's market as better or much better than last year's.

    The high cost of financing remains the biggest challenge for investors, cited by 52% of respondents. Lack of inventory and rising prices were also major concerns, while insurance issues have become a growing concern due to soaring premiums and companies pulling out of high-risk markets. Fix-and-flip investors are more optimistic than rental property investors, with over 45% believing market conditions have improved over the past year.

    Investors are skeptical about Trump's proposals for higher tariffs and mass deportations, citing increased costs and supply chain disruptions as major concerns. However, they do support some of his housing-related ideas, such as programs incentivizing affordable home construction and eliminating unnecessary regulations.

    Rental property investors plan to buy more properties in 2025 compared to flippers, while almost half of all respondents expect home prices to rise by less than 5% in the next year. The survey also found that insurance costs or inability to secure a policy factored into investment decisions for nearly 70% of investors, and over 53% said insurance problems had caused them to miss out on deals.

    The RCN Capital/CJ Patrick Investor Sentiment Index tracks the pulse of real estate investors across the country, gauging their market outlook through quarterly surveys. The index focuses on four key questions: current market outlook, future market outlook, expected home price increases, and number of properties compared to past 12 months.