Investors add to housing inventory headaches
New data from Realtor.com, out this morning, shows that investor-driven purchases accounted for 5.7% of homes sold in April and are reducing inventory in 31 of the top 50 U.S. markets.
Why it matters: Individual homeowners have been struggling to buy homes over the past year amid short supply and rising prices.
- They're competing against one another as well as yield-chasing investors who want homes to flip or rent out.
What they found: Analysts at Realtor.com looked at deed records for single-family homes, condos, townhouses and rowhomes from January 2000 to April 2021 nationally and across the 50 biggest metro areas.
- They defined investors as any absentee owner who had an LLC, LP, LLP, GP or Trust in its name.
- The investor figure may be undercounted because the data doesn't capture small investors who don't register under a company name.
Areas with the most investor activity were the Phoenix/Scottsdale region in Arizona and the greater Atlanta area in Georgia.
- Inventory levels declined 54% year-over-year as of April across the top 50 metro areas, to a median of 2.6 homes per 1,000 households.
What they’re saying: Investors have deeper pockets and more flexibility than typical homebuyers, making them more “daunting competition,” Realtor.com chief economist Danielle Hale said in a statement. What to watch: The next round of housing data. Demand continues to outpace supply, but inventory has started to improve and sales of new single-family homes have fallen.