For those doubting the wisdom of real estate investing, repeat buyers are dominating the housing market, according to the National Association of Realtors. In a recent study, it was reported that 72% of the homes being purchased were by those who had owned real estate before.

Percentage of Home Sales to Repeat Buyers
Year Percentage
May 2009 53%
May 2010 54%
May 2011 64%
May 2012 66%
May 2013 72%

Source: National Association of Realtors

That continues the trend of owners returning to the real estate market.  In May 2009, repeat buyers bought 53% of the homes.  Two years ago May, it was 64%.  Now it is 72%.  According to an article in USA Today by Jule Schmitt, there are a variety of factors at play.

As Schmitt details in her USA Today piece, "1st-Time buyers hit a wall," repeat purchasers have assets from selling their homes or tapping into the equity.  Many repeat buyers are also investors, who have established connections in the credit community.  As real estate has proven to be the greatest wealth creator in history, those owning those assets will be better equipped to buy more in the future.

"It does not surprise me that more are realizing the gains to be made from real estate investing," observed Jerry Cohen, President and Founder of EquityBuild, a real estate investment firm.  Active in real estate since 1984, Cohen has been a principal in more than 1000 real estate transactions.

He continued that, "Real estate is the best asset to own.  History proves that, without a doubt.  The increasing numbers or repeat buyers is to be expected.  Any benefit that comes from owning a stock or a bond, real estate can do much better, which is why fewer Americans are buying securities!"

The broader appeal of owning real estate as an asset compared to stocks and bonds was detailed in another article on this site.

Further demonstrating that investors are becoming more active, one-third of the sales in May were to cash buyers.  The National Association of Realtors also pointed out that investors, who often pay cash, accounted for almost one-fifth of the sales.

Shaun Cohen, President of EquityBuild Finance, the funding arm of EquityBuild, added greater insight by noting that, "Private mortgage notes are becoming more attractive for those interested in high yield real estate investing.  Investors in private mortgage notes are realizing 12% annual returns with no defaults.  Private mortgage notes are a very rewarding way to invest in real estate in addition to buying the actual property!"

Private mortgage notes are loans made by investors to those seeking to buy a property whose needs have not been met by traditional lenders such as banks, credit unions, or mortgage brokers.

It was also noted in the USA Today article that rising home prices are also facilitating more acquisitions by property owners.