Amongst the competitive real estate markets, it’s not just first-time home buyers or sellers looking to downsize or expand. A good chunk of the competition is investors.
According to a report by Redfin, investors purchased approximately 80,000 homes across the country, totaling 18.4% of all homes purchased in the fourth quarter of 2021. This is a record high for investor purchases, with a total of $50 billion spent on investment properties during the quarter.
Many investors are cashing in as home prices continue to rise. Flipped homes are selling for more money than ever, and rentals are harder to come by, causing a significant increase in rental prices. Median rent prices have increased by 16.4% nationally year-over-year, landing at a median price of $1,927 per month.
While investors still tend to go after lower-priced homes, a record-high 32% of investor purchases were mid-priced homes in the fourth quarter compared to 24% a year earlier. About 75% of the total homes purchased by investors in the fourth quarter were all-cash deals.
Companies like Fundrise have been actively pursuing single-family rental communities in hot southern markets around Florida and South Carolina, allowing retail investors to gain exposure to this asset class as well. Most recently, the company’s interval fund, backed by Goldman Sachs (NYSE:GS) purchased an entire community of single-family homes in Central Florida.
With an influx of northern sellers flocking to warmer weather, plus many buyers getting priced out of the market due to skyrocketing home prices and increased interest rates, the demand for rentals remains on the rise.
Here are the seven markets where investors accounted for more than 25% of all home purchases in the fourth quarter of 2021.
Orlando, FL
Investors buying in the fourth quarter made up 25.9% of all sales in the Orlando market. The median sale price in this market is $361,000, up 23.3% year-over-year. The median days on the market is 8, down 5 days from last year.
Miami, FL
In Miami, 27.5% of all sales in the fourth quarter were made by investors. The median sale price in this market is $520,000, up 26.8% year-over-year. The median days on the market is 45, down 19 days from last year.
Phoenix, AZ
Investors in Phoenix made up 28.4% of all home sales in the fourth quarter. The median sale price in this market is $460,000, having increased 27.6% year-over-year. The median days on the market is 20, down 3 days from last year.
Las Vegas, NV
In Las Vegas, 29.2% of all sales in the fourth quarter were purchased by investors. The median sale price in this market is $435,000, up 30.6% year-over-year. The median days on the market is 15, down 4 days from last year.
Jacksonville, FL
Investors in Jacksonville purchased 29.8% of all fourth-quarter sales. The median sale price in this market is $300,000, an increase of 22% year-over-year. The median days on the market is 19, down 8 days from last year.
Charlotte, NC
Investors purchased 32.1% of all sales in the Charlotte market in the fourth quarter. The median sale price in this market is $400,000, an increase of 22.3% year-over-year. The median days on the market is 21, down 12 days from last year.
Atlanta, GA
In Atlanta, 32.7% of all fourth-quarter sales were made by investors. The median sale price in this market is $427,000, having increased by 12.7% year-over-year. The median days on the market is 14, down 11 days from last year.
<Market data provided by Redfin
Related: 6 Ways Retail Investors Can Get Their Piece Of The Wall Street Housing Grab
Image by Andy Dean Photography on Shutterstock
