Investors are the wild card of the current housing boom [Note: Subscription]. The NAR released a report last spring that said [23% of all homes purchased in 2004 were for investment and an additional 13% were vacation homes](http://www.realtor.org/PublicAffairsWeb.nsf/Pages/SecongHomeMktSurges05?OpenDocument). Presumably, ratio of investors to owner occupancy will be even greater in 2005.

Here lies the problem for investors…

The rental market has taken a large hit over the past 4 years as lower mortgage rates have converted would-be renters into buyers. The free flow of capital stimulated rental development up until the past year, when it switched to condo development as prices rose rapidly. Now [the increase in investor activity may drive down rents [Note: Subscription]](http://www.realestatejournal.com/propertyreport/residential/20050815-simon.html?rejcontent=mail), placing more pressure for investors to sell quickly and not hold out for a higher price.