RCN Capital/CJ Patrick: Investor Sentiment Falls to Record Low
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Real estate investor sentiment fell for the second consecutive quarter, hitting a record low index score of 84 in the latest RCN Capital/CJ Patrick Company Investor Sentiment Index.
The index score was three points lower than the prior quarter and dropped by 18 points year-over-year.
“The drop was almost entirely due to how investors view current market conditions,” the report said. “Only 26% of investors believe market conditions are better than they were a year ago, the lowest share on record, while 45% of respondents believe market conditions have worsened, the highest percentage recorded in the history of the survey.”
The report noted investors were more positive in their responses to other metrics, including the outlook for future market conditions, home price trends, and plans for property purchases, suggesting at least some optimism going forward.
“Investors, both fix-and-flip and rental property investors, clearly feel that market conditions today have become more and more difficult,” RCN Capital CEO Jeffrey Tesch said. “In addition to the ongoing conflict in Iran, rising finance costs, limited inventory, escalating home and renovation costs and downward pressure on rental rates are all contributing factors for their increased pessimism.”
The survey said he percentage of investors who viewed today’s market as “better or much better” than it was a year ago fell to just under 26% from 35% in the most recent survey in Spring 2026. Those who viewed the market today as being worse rose from 36% to 45%. On the other hand, 34% of the investors believe that conditions will improve over the next six months, up from 32% in the previous survey; and the number expecting conditions to worsen fell from 32% to 27%.
The Investor Sentiment Index fell for the second consecutive quarter after having plateaued for two quarters at a score of 101. This quarter’s score of 84 was the lowest index number in the 12 quarters reported and marks the first time when the Index reported scores below 90 in consecutive quarters. Rick Sharga, CEO of CJ Patrick Co., said real estate investor sentiment appears to be impacting investor purchase activity. “Real estate investors purchased 23% fewer homes in the first quarter of 2026 than they did in the previous quarter and in the first quarter of 2025. The survey also shows that 32% of the respondents don’t plan to buy any properties at all this year, and only 9% plan to buy more than they did a year ago,” he said.
