SANTA CLARA, Calif.,
July 29, 2021 /PRNewswire/
-- Despite the common perception that investors are always in
competition with everyday buyers, new findings from the
Realtor.com® Investor Report shows that isn't always the
case. According to the data, investors are exacerbating the
inventory shortage in 31 of the top 50 U.S. markets, but in roughly
19 markets – including Atlanta,
Dallas, Baltimore, Los
Angeles and San Francisco –
they are actually helping to replenish the number of homes for
sale.
Realtor.com® analyzed U.S. deed records from January
2000-April 2021 to determine the
number of investor sales versus purchases in the 50 largest U.S.
markets. In this report, areas where investors are contributing
inventory refers to places where investors are selling more homes
than they are buying. Places where investors are taking away
inventory are locales where investors are buying more homes than
they sell.
"Today's buyers are facing a tough market and data shows they
aren't just competing with each other. With deep pockets and more
flexibility, investors can be daunting competition for the typical
homebuyer. Right now, data shows investors are buying more homes
than they are selling, and while they get a lot of attention in
today's market, it's worth remembering that they can also
contribute to inventory levels," said Realtor.com® Chief
Economist Danielle Hale. "Whether a
market is appealing to investors depends on a variety of factors,
including how local home prices compare to rents. When home prices
are rising and rents are more stagnant, investors are more likely
to sell off properties and contribute inventory. On the other hand,
the higher rents are compared to home prices the more attractive
the market is to investors looking to buy homes and convert them
into rental properties."
Investors help buyers in big metros with limited homes for
sale
In April, investors added to the number of homes on the
market in 19 of the 50 largest U.S. metros, with Atlanta (+399 homes), Dallas (+239 homes), Baltimore (+188 homes), Los Angeles (+112 homes) and San Francisco (+93 homes) seeing the biggest
contributions. Compared to the markets where investors took away
inventory in April, these metros tend to be bigger, with fewer
homes for sale and higher listing prices.
Compared to nationwide inventory declines in April (-53%), the
top 10 markets where investors are contributing saw a smaller drop,
at an average -44% during the same timeframe. However, some of
these metros saw even bigger inventory gaps from last year,
including the two markets where investors contributed the most
inventory in April: Atlanta
(-63.4%) and Dallas (-69.7%). At
an average population size of 5.5 million, these markets also
encompass some of the nation's biggest tech hubs, such as
San Francisco and San Jose. Home to some of the most expensive
real estate in the U.S., these metros had an average median listing
price of $668,000 in April, well
above the national median price of $375,000.
Hale added, "High home prices, slower rent growth, and
uncertainty over the future of work in these markets are likely
causing investors to reevaluate their property portfolios in these
areas. And with homes still selling quickly, even in these metros,
an investor deciding to sell can look forward to being able to
reposition their dollars elsewhere in a very short period of
time."
Investors are snatching up homes in smaller markets with
higher inventory levels
Investors took away inventory in 31
of the largest U.S. markets, led by Phoenix (-429 homes), Charlotte, N.C. (-287 homes), Miami (-256 homes),Tampa (-224 homes) and Chicago (-221 homes). Compared to the markets
where investors helped buyers, these metros are smaller and less
crowded, with more available home listings relative to all
households, lower home prices, and relatively higher rental price
growth.
While average home prices are more affordable in these top
markets, rental prices grew at a faster year-over-year pace on
average (+4.6%) than in top markets with more investor sales
(+0.1%) in April. In Tampa, where
the $327,000 median listing price was
below the national average of $375,000 in April, rents grew 4.5 times faster
than the national rate, up 12.4% year-over-year.
The markets where investors are competing with homebuyers and
taking away inventory tend to offer the perfect storm of factors
for converting homes into rental properties. These markets have
relatively more homes available, at 3.7 properties for every 1,000
residences versus 2.8 in markets where investors are adding to
inventory. While these metros have experienced more rapid
year-over-year inventory declines in April (-57%), rapid rent price
gains keep calculations favorable for buying which means that until
rent trends change, investors are likely to be homebuyer foes, not
friends.
"Getting ahead in today's market is tough, especially when you
are contending with professional investors," said Lexie Holbert, home and living expert at
Realtor.com®. "Setting up price alerts on
Realtor.com® is a really helpful trick for getting ahead
of the competition. When a home that meets your parameters hits the
market, you'll get a notification so you can get in and try to make
an offer."
Realtor.com® Investor Report,
April 2021 – Top 10 Markets by Net
Positive Contributions to Inventory, April
2021
Metro
|
Investor Net
Contribution to Inventory
|
Median Listing
Price
|
Median Listing
Price Growth Y/Y
|
Median Rental Rate
Y/Y
|
Price to Rent
Ratio
|
Inventory per 1000
HH
|
Inventory
Y/Y
|
Atlanta-Sandy
Springs-Roswell, Ga.
|
399
|
$392,000
|
20.70%
|
9.80%
|
22
|
6.1
|
-63.40%
|
Dallas-Fort
Worth-Arlington, Texas
|
239
|
$380,000
|
12.00%
|
3.60%
|
24.5
|
2
|
-69.70%
|
Baltimore-Columbia-Towson, Md.
|
188
|
$336,000
|
2.40%
|
5.10%
|
17.8
|
2.9
|
-53.20%
|
Los Angeles-Long
Beach-Anaheim, Calif.
|
112
|
$1,114,000
|
23.60%
|
-4.00%
|
37.1
|
2.9
|
-22.10%
|
San
Francisco-Oakland-Hayward, Calif.
|
93
|
$1,062,000
|
13.60%
|
-10.90%
|
33.3
|
2
|
-6.20%
|
Washington-Arlington-Alexandria, DC-Va.-Md.-W.
Va.
|
84
|
$506,000
|
1.20%
|
-3.90%
|
22.4
|
2.9
|
-33.00%
|
Houston-The
Woodlands-Sugar Land, Texas
|
73
|
$355,000
|
14.10%
|
0.90%
|
24.4
|
4.8
|
-54.90%
|
San Antonio-New
Braunfels, Texas
|
67
|
$324,000
|
9.00%
|
4.40%
|
25.1
|
3
|
-70.70%
|
San
Jose-Sunnyvale-Santa Clara, Calif.
|
66
|
$1,238,000
|
3.30%
|
-12.50%
|
38.3
|
1.8
|
-10.80%
|
Indianapolis-Carmel-Anderson, Ind.
|
60
|
$287,000
|
0.90%
|
8.60%
|
22.4
|
2
|
-59.50%
|
Realtor.com® Investor Report,
April 2021 – Top 10 Markets by Net
Negative Contributions to Inventory
Metro
|
Investor Net
Contribution to Inventory
|
Median Listing
Price
|
Median Listing
Price Growth Y/Y
|
Median Rental Rate
Y/Y
|
Price to Rent
Ratio
|
Inventory per 1000
HH
|
Inventory
Y/Y
|
Phoenix-Mesa-Scottsdale, Ariz.
|
-429
|
$457,000
|
21.90%
|
11.30%
|
25.9
|
2.2
|
-68.00%
|
Charlotte-Concord-Gastonia, N.C.-S.C.
|
-287
|
$403,000
|
18.70%
|
7.80%
|
24.8
|
2.1
|
-66.90%
|
Miami-Fort
Lauderdale-West Palm Beach, Fla.
|
-256
|
$418,000
|
4.80%
|
3.20%
|
18
|
10.6
|
-46.00%
|
Tampa-St.
Petersburg-Clearwater, Fla.
|
-224
|
$327,000
|
17.30%
|
12.40%
|
18.7
|
2.6
|
-72.50%
|
Chicago-Naperville-Elgin, Ill.-Ind.-Wis.
|
-221
|
$356,000
|
9.70%
|
-3.50%
|
18.5
|
4.6
|
-43.40%
|
Orlando-Kissimmee-Sanford, Fla.
|
-151
|
$332,000
|
6.20%
|
4.10%
|
20
|
3.5
|
-61.70%
|
Jacksonville,
Fla.
|
-144
|
$349,000
|
11.90%
|
6.20%
|
23.9
|
3.7
|
-72.60%
|
St. Louis,
Mo.-Ill.
|
-126
|
$266,000
|
13.50%
|
7.80%
|
20.1
|
3.3
|
-43.90%
|
Detroit-Warren-Dearborn, Mich
|
-121
|
$285,000
|
16.30%
|
4.40%
|
21.1
|
2.7
|
-53.50%
|
Seattle-Tacoma-Bellevue, Wash.
|
-106
|
$679,000
|
13.20%
|
-7.30%
|
31.8
|
1.7
|
-44.60%
|
Realtor.com® Investor Report,
April 2021 – 50 Largest U.S.
Metropolitan Areas
Metro
|
Investor Net
Contribution to Inventory
|
Median Listing
Price
|
Median Listing
Price Growth Y/Y
|
Median Rental Rate
Y/Y
|
Price to Rent
Ratio
|
Inventory per 1000
HH
|
Inventory
Y/Y
|
Atlanta-Sandy
Springs-Roswell, Ga.
|
399
|
$392,000
|
20.70%
|
9.80%
|
22
|
6.1
|
-63.40%
|
Austin-Round Rock,
Texas
|
3
|
$515,000
|
40.60%
|
1.70%
|
31.3
|
2
|
-72.70%
|
Baltimore-Columbia-Towson, Md.
|
188
|
$336,000
|
2.40%
|
5.10%
|
17.8
|
2.9
|
-53.20%
|
Birmingham-Hoover,
Ala.
|
-93
|
$277,000
|
6.40%
|
7.80%
|
22.7
|
3.8
|
-51.40%
|
Boston-Cambridge-Newton, Mass.-N.H.
|
-49
|
$699,000
|
13.30%
|
-6.30%
|
24.9
|
2.6
|
-25.10%
|
Buffalo-Cheektowaga-Niagara Falls, N.Y.
|
-5
|
$254,000
|
15.70%
|
-0.90%
|
19.3
|
1.5
|
-41.30%
|
Charlotte-Concord-Gastonia, N.C.-S.C.
|
-287
|
$403,000
|
18.70%
|
7.80%
|
24.8
|
2.1
|
-66.90%
|
Chicago-Naperville-Elgin, Ill.-Ind.-Wis.
|
-221
|
$356,000
|
9.70%
|
-3.50%
|
18.5
|
4.6
|
-43.40%
|
Cincinnati,
Ohio-Ky.-Ind.
|
-46
|
$352,000
|
15.80%
|
7.30%
|
26.7
|
1.9
|
-54.40%
|
Cleveland-Elyria,
Ohio
|
-27
|
$234,000
|
17.00%
|
7.00%
|
18.2
|
2.2
|
-54.50%
|
Columbus,
Ohio
|
-37
|
$315,000
|
1.70%
|
6.20%
|
24.1
|
1.6
|
-48.90%
|
Dallas-Fort
Worth-Arlington, Texas
|
239
|
$380,000
|
12.00%
|
3.60%
|
24.5
|
2
|
-69.70%
|
Denver-Aurora-Lakewood, Colo.
|
-42
|
$575,000
|
5.10%
|
2.20%
|
28.4
|
1.8
|
-56.80%
|
Detroit-Warren-Dearborn, Mich
|
-121
|
$285,000
|
16.30%
|
4.40%
|
21.1
|
2.7
|
-53.50%
|
Hartford-West
Hartford-East Hartford, Conn.
|
2
|
$310,000
|
8.80%
|
7.10%
|
17.2
|
5.9
|
-35.50%
|
Houston-The
Woodlands-Sugar Land, Texas
|
73
|
$355,000
|
14.10%
|
0.90%
|
24.4
|
4.8
|
-54.90%
|
Indianapolis-Carmel-Anderson, Ind.
|
60
|
$287,000
|
0.90%
|
8.60%
|
22.4
|
2
|
-59.50%
|
Jacksonville,
Fla.
|
-144
|
$349,000
|
11.90%
|
6.20%
|
23.9
|
3.7
|
-72.60%
|
Kansas City,
Mo.-Kan.
|
39
|
$368,000
|
8.10%
|
2.20%
|
28.5
|
2.3
|
-55.50%
|
Las
Vegas-Henderson-Paradise, Nev.
|
-23
|
$379,000
|
15.30%
|
10.30%
|
24.5
|
5
|
-51.20%
|
Los Angeles-Long
Beach-Anaheim, Calif.
|
112
|
$1,114,000
|
23.60%
|
-4.00%
|
37.1
|
2.9
|
-22.10%
|
Louisville/Jefferson
County, Ky.-Ind.
|
-16
|
$272,000
|
-1.00%
|
7.10%
|
22.8
|
2.6
|
-54.00%
|
Memphis,
Tenn.-Miss.-Ark.
|
-13
|
$240,000
|
-4.00%
|
13.50%
|
19
|
2
|
-58.00%
|
Miami-Fort
Lauderdale-West Palm Beach, Fla.
|
-256
|
$418,000
|
4.80%
|
3.20%
|
18
|
10.6
|
-46.00%
|
Milwaukee-Waukesha-West Allis, Wis.
|
-17
|
$332,000
|
-2.40%
|
-1.80%
|
20.8
|
1.5
|
-54.90%
|
Minneapolis-St.
Paul-Bloomington, Minn.-Wis.
|
-26
|
$366,000
|
0.30%
|
-1.00%
|
21.2
|
3.2
|
-44.50%
|
Nashville-Davidson--Murfreesboro--Franklin,
Tenn.
|
2
|
$417,000
|
11.20%
|
3.30%
|
25.9
|
2.5
|
-70.60%
|
New Orleans-Metairie,
La.
|
-81
|
$345,000
|
19.20%
|
11.80%
|
21.5
|
4.1
|
-50.70%
|
New
York-Newark-Jersey City, N.Y.-N.J.-Pa.
|
-85
|
$629,000
|
9.30%
|
0.00%
|
22.3
|
7.9
|
-18.10%
|
Oklahoma City,
Okla.
|
-52
|
$313,000
|
19.70%
|
1.30%
|
32.6
|
2.5
|
-67.20%
|
Orlando-Kissimmee-Sanford, Fla.
|
-151
|
$332,000
|
6.20%
|
4.10%
|
20
|
3.5
|
-61.70%
|
Philadelphia-Camden-Wilmington,
Pa.-N.J.-Del.-Md.
|
-91
|
$340,000
|
13.30%
|
3.90%
|
17.7
|
3.2
|
-36.80%
|
Phoenix-Mesa-Scottsdale, Ariz.
|
-429
|
$457,000
|
21.90%
|
11.30%
|
25.9
|
2.2
|
-68.00%
|
Pittsburgh,
Pa.
|
-32
|
$272,000
|
25.20%
|
2.00%
|
17.5
|
2.7
|
-49.90%
|
Portland-Vancouver-Hillsboro, Ore.-Wash.
|
16
|
$540,000
|
12.90%
|
2.30%
|
29.3
|
2.6
|
-54.60%
|
Providence-Warwick,
R.I.-Mass.
|
4
|
$420,000
|
5.30%
|
7.90%
|
20.6
|
2.1
|
-57.90%
|
Raleigh,
N.C.
|
-27
|
$412,000
|
12.60%
|
5.40%
|
27.1
|
2.2
|
-72.60%
|
Richmond,
Va.
|
-43
|
$375,000
|
11.00%
|
10.60%
|
26.2
|
3
|
-55.50%
|
Riverside-San
Bernardino-Ontario, Calif.
|
35
|
$512,000
|
22.00%
|
15.00%
|
21.9
|
3
|
-63.70%
|
Rochester,
N.Y.
|
-31
|
$264,000
|
5.80%
|
8.60%
|
18.4
|
1.9
|
-41.60%
|
Sacramento--Roseville--Arden-Arcade,
Calif.
|
23
|
$592,000
|
18.60%
|
13.60%
|
29
|
2.1
|
-54.40%
|
San Antonio-New
Braunfels, Texas
|
67
|
$324,000
|
9.00%
|
4.40%
|
25.1
|
3
|
-70.70%
|
San Diego-Carlsbad,
Calif.
|
49
|
$852,000
|
17.30%
|
4.80%
|
31.2
|
2.7
|
-31.50%
|
San
Francisco-Oakland-Hayward, Calif.
|
93
|
$1,062,000
|
13.60%
|
-10.90%
|
33.3
|
2
|
-6.20%
|
San
Jose-Sunnyvale-Santa Clara, Calif.
|
66
|
$1,238,000
|
3.30%
|
-12.50%
|
38.3
|
1.8
|
-10.80%
|
Seattle-Tacoma-Bellevue, Wash.
|
-106
|
$679,000
|
13.20%
|
-7.30%
|
31.8
|
1.7
|
-44.60%
|
St. Louis,
Mo.-Ill.
|
-126
|
$266,000
|
13.50%
|
7.80%
|
20.1
|
3.3
|
-43.90%
|
Tampa-St.
Petersburg-Clearwater, Fla.
|
-224
|
$327,000
|
17.30%
|
12.40%
|
18.7
|
2.6
|
-72.50%
|
Virginia
Beach-Norfolk-Newport News, Va.-N.C.
|
-8
|
$323,000
|
1.40%
|
8.00%
|
21.5
|
5.3
|
-53.50%
|
Washington-Arlington-Alexandria, DC-Va.-Md.-W.
Va.
|
84
|
$506,000
|
1.20%
|
-3.90%
|
22.4
|
2.9
|
-33.00%
|
Methodology
In this analysis we examined deed records
dating from January 2000 to
April 2021 nationally and in the 50
largest metro areas. We included only single family homes, condos,
townhomes and rowhomes and we excluded multi-family buildings which
is not a market the typical homebuyer is competitive in. We
attempted to capture business-oriented, buy and hold investor
purchases. We defined an investor as a buyer or seller that was/is
an absentee-owner and that has a name which includes the following:
LLP, LP, LLC, GP, or TRUST. In addition to this broad definition,
we also excluded keywords and sale types relating to home builders,
relocation service companies, iBuyers, government bodies and
financial institutions. Data limitations mean that this analysis
likely excludes small investors not registered under a company
name. Census estimates show that in 2018 41.2% of rental units were
owned by individual investors while 47.5% of units were owned by
Trusts, LLPs, LPs, or LLCs, General Partnerships, Real Estate
Investment Trusts, or Real Estate Corporations. Ownership entity
for more than half of the remaining units was not reported.
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