Cash offers for Richmond-area houses are rising in the counties
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The Richmond area hasn't been immune to the wave of all-cash offers and investors flooding the local housing market.
What's happening: The number of all-cash offers is rising in the counties, according to data provided to Axios by the Richmond Association of Realtors.
- In Chesterfield, 8.5% of homes were bought with cash in 2017. Midway through 2022, it's up to 11%.
- Henrico County jumped from 12.7% in cash sales in 2017 to 16.7% so far this year.
Why it matters: Cash offers are a window into how much property is getting purchased by investors, who moved into the single-family property market in recent years and made up a record 28% of single-family home sales nationally in the first quarter of this year.
- Plus, all-cash buyers are immune from fluctuations in mortgage rates and can offer sellers a faster and easier closing.
Zoom in: In Richmond, all-cash offers seem to be on the decline. In 2017, 25% of homes in the city — including single-family homes, condos and townhouses — were bought with cash.
- It's down to 22% so far this year.
Driving the news: The role of investors in housing, especially single-family houses, has caught the attention of Congress. In June, the House Financial Services Committee released a bombshell report based on surveys of the five leading single-family rental (SFR) companies, Axios' Nate Rau reports.
- The report found the companies tend to make cash offers. Between 2018 and 2021, the companies offered $24.7 billion in bonds and other financial instruments to investors, and particularly focused their efforts on the South.
- Their buying strategies zero in on neighborhoods with significantly larger Black populations than the national average, the report found.
The bottom line: Across the country and here at home, investors have been buying up the local housing stock and primarily turning those into rentals, according to the congressional report, which has contributed to the tight housing market.
Editor's note: This story has been corrected to note that investors accounted for 28% of single-family home sales in the first quarter of 2022 (not that they own as much as a quarter of the housing stock nationally).