RCN Capital: Real Estate Investor Sentiment Steady in Q3

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Real estate investor sentiment was fairly steady in Q3, reflected in the Fall 2025 RCN Capital/CJ Patrick Company Investor Index. The index fell by only a point to 101 from 102 in Q2.

However, the index is down by 23 points from the prior year.

The percentage of investors who viewed today’s market as better or much better than it was a year ago fell to 45%, down from 49%. Those who viewed the market as the same as last year hit 30%, up from 26%. And, the percentage of investors who felt the conditions had worsened fell from 25% to 24%.

But, investors are optimistic about where the market is headed, with 48% expecting it to improve and 33% expecting it to stay the same. Only 19% are concerned it might decline.

However, investors also indicated that they personally would be buying fewer homes in the next 12 months.

“Market conditions for real estate investors continue to prove challenging, with stubbornly high financing rates, rising labor and materials costs, and soaring insurance premiums taking a toll on investor profit margins,” said RCN Capital CEO Jeffrey Tesch. “These higher costs have also made affordability a problem for homebuyers–especially first-time buyers –which weakens demand and limits opportunities for fix-and-flip transactions.”

Respondents included rental property investors, at 44%, flippers, at 38%, and wholesalers, at 17%. About a third–34%–said they’ve stayed true to their primary type of investment, 55% said they’ve switched their primary model over the past few years, and 11% said they’ve added another form of investment.

As home prices and asking rents have begun to decline in at least some markets, almost 29% of respondents said they’ve reduced the sale or rental price for their properties. Twenty-one percent said they’ve scaled back their activity, and 22% said while they haven’t done so yet, they expect they will need to soon.

Investors also remain concerned about the availability of insurance, with more than 77% of respondents saying that it’s a factor in their investment decision-making. Sixty-four percent claim that it’s caused them to miss out on an opportunity to buy or sell an investment property.

The most respondents–at nearly 70%–listed the high cost of financing as a challenge. Next were rising home prices, at 38%, lack of inventory, at 36%, competition from other investors, at 34%, and the rising costs of material and labor, at 28%.

“Most of the challenges investors are concerned about directly affect an investor’s profit margin, and this is an issue most acutely felt by smaller investors, who make up over 90% of the residential real estate investment market,” said Rick Sharga, CJ Patrick Company CEO. “Financial returns on property sales or rentals are critical for these investors, since 76% of them report that investment income is either their primary source of income or an important supplemental source of funds. Compressed margins can be the difference between a comfortable lifestyle and financial distress.”