We're nowhere near boom-time numbers, but real estate investors are responding to rock-bottom prices and plunging into their local markets at more than double the rate they did barely seven months ago.

That's the finding of a new study based on interviews with a nationally-representative sample of more than one thousand property buyers.

The quarterly "homeownership survey" by realty information firm Move.dot.com found that one of every eight buyers last month was an investor - someone looking to acquire property at a favorable price, planning to fix it up, rent it out or resell later for a profit.

The investor ratio is up from just one in 20 buyers as recently as March, and represents a huge turnaround in Americans' attitude toward real estate.

Buyers who target foreclosure sales are particularly active right now, according to the study, and account for 25 percent of all consumers looking to purchase houses.

Among these foreclosure buyers, fully 42 percent are investors. Thirteen percent say they're buying properties to convert into rentals. Eleven percent intend to rehab them and sell them as quickly as possible.

And interestingly, 17 percent say they plan to let a family member live in them for an extended period of time -- until market values have rebounded enough to sell the house at a substantial profit.

How good a deal do foreclosure investors and other buyers think they're getting on house prices? Very good indeed: Nearly two out of three expect to acquire houses for at least 20 percent below the current market value of the property. Thirty eight percent expect at least a 25 percent discount below actual market value.

So these investors essentially anticipate booking a paper gain of 20 percent or more on the day they close. They also tend to be fairly optimistic about where prices are headed in their local markets.

Seventy three percent expect the houses they buy to appreciate by ten percent or more in the coming five years. Twenty eight percent expect a 20 percent rate of appreciation.

More than 42 percent of buyers are making their investments now -- rather than at some future time -- because they believe house prices have pretty much hit bottom for this cycle and they want to take advantage of today's bumper crop of foreclosure opportunities.

Now, nobody can predict for sure where prices are headed … and there's always risk in real estate.

But in most parts of the country, today's home prices - especially when you're buying in a distress situation -- probably represent a safer deal than they've been in years, assuming proper due diligence by the investor.

Published: November 27, 2009

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Kenneth R. Harney writes an award-winning, nationally-syndicated column on housing and real estate from Washington, D.C. He is also managing director of the National Real Estate Development Center, a professional education company. He is a past member of the Federal Reserve Board's Consumer Advisory Council, a committee that by federal statute reviews all Fed actions on home mortgage, consumer credit and banking industry regulation. He served as a member of the U.S. Department of Housing and Urban Development's Working Group on Computerized Loan Origination (CLO) systems, and is a member of the Editorial Board of the Fannie Mae Foundation's journal, Housing Policy Debate. He is the author of two books on mortgage finance and real estate.