Have real estate investments peaked? After years of growth during the Foreclosure Eva, investment purchases declined slightly last year after surging 64.5 percent in 2011. With the cost and competition to buy distress sales growing and prices for normal homes rising, will investors pull back and start cashing in their assets?

Despite multi-billion dollar buying sprees by well-funded Wall Street hedge funds, real estate investors bought fewer properties in 2012 than they did in 2011, which was a record year for investors. Investment-home sales declined 2.1 percent to 1.21 million from 1.23 million in 2011, but those sales had been well under a million during the market downturn. Owner-occupied purchases jumped 17.4 percent to 3.27 million last year from 2.79 million in 2011, according to an annual survey by the National Association of Realtors.

“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 NAR’s Lawrence Yun. “With rising prices and limited inventory, notably in the low price ranges, investors are likely to step back in coming years.”

The price to be a real estate investor rose significantly last year. The median investment-home price was $115,000 in 2012, up 15.0 percent from $100,000 in 2011. All-cash purchases remain common in the investment market: half of investment buyers paid cash in 2012,. Forty-seven percent of investment homes purchased in 2012 were distressed homes. The median downpayment for both investment buyers was 27 percent, the same as in 2011.

Though investment buyers said they plan to hold the property for a median of 8 years, up from 5 years in 2011, indications are that changing economic conditions may put pressure on them to sell.

Six percent of homes purchased by investment buyers last year have already been resold, and another 8 percent are planned to be sold within a year. In the 2011 study, 5 percent of investment homes were already resold, and 8 percent were planned to be sold within a year.

“Property flipping modestly increased in in 2012,” Yun said. “However, this isn’t flipping in the sense of what took place during the housing boom. Rather, investors generally are renovating and improving properties before placing them back on the market to resell at a profit.”

Forty-seven percent of investment buyers said they were likely to purchase another investment property within two years, as did 37 percent of vacation-home buyers. Twenty-nine percent of vacation buyers said they were likely to purchase another vacation home within two years, as did 31 percent of investment buyers.