Rising home prices appears to be deterring some real estate investors from investing money into the sector.
The number of investment properties purchased last year fell 2.1 percent to 1.21 million, from 1.23 million in 2011, according to the National Association of Realtors (NAR). Meanwhile, the national median price for existing homes was $173,600 in March - a rise of 11.6 percent from a year earlier.
"Investors have been very active in the market over the past two years, attracted mostly by discounted foreclosures that could be quickly turned into profitable rentals," said Lawrence Yun, chief economist for the trade group, in a statement.
"With rising prices and limited inventory, notably in the low price ranges, investors are likely to step back in coming years."
Speaking at the group's Washington headquarters, NAR chief economist Lawrence Yun was bullish about the recovery. He said rising home values are fuelling a "housing wealth recovery" to the tune of $1.4 trillion in the last 12 months.
According to Bloomberg News, Blackstone Group LP has splashed out $3.5bn) to buy 20,000 foreclosed homes in order to turn them into rentals. Last month, David Stockman, Ronald Reagan's budget director, told the Daily Ticket blog that such buyers are indecisive. He said a new housing bubble is already here and that the housing recovery can't last, because of the poor numbers of first-time buyers and trade-up buyers.
