Redfin reports real estate investors bought a record 18% of US homes sold in the third quarter


Investors held the largest market share in high-risk flood and heat-risk subways, such as Atlanta, Phoenix, Charlotte, Jacksonville, and Miami

SEATTLE, November 15, 2021 / PRNewswire / – (NASDAQ: RDFN) – Real estate investors bought a record 18.2% of US homes bought in the third quarter of 2021, up from a revised rate of 16.1% in the second quarter and 11, 2% per year. earlier, according to a new report by Redfin (www.redfin.com), technology-based real estate brokerage.

Redfin logo (PRNewsfoto / Redfin)

Investors bought a record 90,215 homes in the third quarter, up 10.1% from the previous quarter and 80.2% from a year ago, the second largest gain in a year on the other never recorded. In dollars, investors bought a record $ 63.6 billion home values ​​in the third quarter, up from a $ 58.8 billion in the second trimester and $ 35.7 billion one year earlier. The typical house they bought costs $ 438770-5.3% more than a year earlier against a background of rising house prices. More than three-quarters (76.8%) of investor home purchases were paid for in cash in the third quarter.

“Rising house prices fueled by an intense housing shortage has created opportunities for investors to reap big profits,” said Redfin’s senior economist. Sheharyar Bokhari. “These same factors have driven more Americans to rent, which also creates opportunities for investors, as investors typically turn the homes they buy into rentals and can now charge higher rents.”

Average monthly rents rose 10.7% year-on-year in September, the fastest growth in at least two years, while the median home selling price rose 13.9%.

“With cash-rich investors storming the housing market, many individual buyers have found it difficult to compete,” Bokhari said. “The good news for these buyers is that the real estate market has started to cool down. The bidding wars are down, and if home price growth continues to slow, we could see investors slowing down their turnover.”

Redfin defines an investor as any institution or company that purchases residential real estate. All “records” in the report go back to the first quarter of 2000.

Single-family homes account for a record 74% of investor purchases

Single-family homes accounted for nearly 3 in 4 (74.4%) of investor purchases in the third quarter, the highest level on record. This is up from 70.6% a year earlier. Meanwhile, condos / co-ops accounted for 16.9% of investor purchases, a record low and down from 19.8% in the third quarter of 2020. Townhouses and multi-family dwellings accounted for 5.4%, respectively. % and 3.4% of investor purchases, little change from a year earlier.

Low-cost homes account for 36% of investor purchases – the smallest share on record

While cheap homes still represent the lion’s share of investor purchases, their share of the pie is shrinking. Low-cost homes accounted for 36.1% of investor purchases in the third quarter, a record down from 47% a year earlier. High-priced homes accounted for 30.8% of investor purchases, down slightly from 32.3% a year earlier.

Meanwhile, mid-priced homes accounted for a third (33%) of investor purchases, up from 20.8% in the third quarter of 2020. This was the first quarter on record in which mid-priced homes accounted for a larger share of investors. purchases than expensive homes.

Houses with high heat and storm risk account for more than 60% of investor purchases

Almost two-thirds (65.2%) of homes bought by investors in the third quarter were at high heat risk, and a similar share (64.3%) were at high storm risk. Meanwhile, 27.1% were at high risk of drought, 22.2% at high risk of flooding, and 3% at high risk of fire. These percentages do not add up to 100% because it is possible that houses face more than one climate risk.

Investors were more likely than non-investors to purchase homes at high risk of heat, drought and flooding in the third quarter.

High fire risk homes likely represent a relatively small share of overall purchases, as many high fire risk areas are rural with very few homes, Bokhari added.

Investors have the highest market share in Atlanta, Phoenix

In Atlanta, nearly a third (32%) of homes sold in the third quarter were bought by investors, the highest share of the 40 U.S. metropolitan areas analyzed by Redfin. Then came Phoenix (31.7%), Charlotte, North Carolina (31.5%), Jacksonville, Florida (28.3%) and Miami (28.1%).

Atlanta also recorded the largest year-over-year gain, with investor market share reaching 32% in the third quarter, up from 12.9% a year earlier (+19.1 percentage points). The second biggest jump was in Charlotte (+18.2 ppts), followed by Phoenix (17.7 points), Jacksonville (+15.2 points) and Las Vegas (+14.6 points).

In Providence, RI, only 5.4% of homes sold in the third quarter were bought by investors, a lower share than any other metropolitan area in this analysis. It was followed by Montgomery County, Pennsylvania (7.1%), Virginia Beach, Virginia (7.1%), Washington DC (7.2%) and Warren, Michigan (7.4%).

new York and San jose were the only two metropolises to experience year-over-year market share declines, falling 0.6 and 0.4 percentage points respectively.

To read the full report, including the full metropolitan-level data and methodology, please visit: https://www.redfin.com/news/investor-home-purchases-q3-2021

About Redfin

Redfin (www.redfin.com) is a technology-driven real estate company. We help people find housing through brokerage, Instant Home Buyers (iBuying), rentals, loans, title insurance and renovations. We sell houses for more money and charge half the cost. We also manage the first real estate brokerage site in the country. Our homebuying clients see homes with on-demand tours first, and our loan and title services help them close quickly. Customers selling a home can receive an instant cash offer from Redfin or have our home improvement team fix their home to sell it for the best price. Our rental business enables millions of people across the country to find apartments and houses for rent. Since our launch in 2006, we have saved more than $ 1 billion in committee. We serve over 100 markets across the United States and Canada and employs over 6,000 people.

For more information or to contact a local Redfin real estate agent, visit www.redfin.com. To learn more about housing market trends and download data, visit Redfin Data Center. To be added to Redfin’s press release mailing list, send an email press@redfin.com. To consult the Redfin press center, Click here.

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SOURCE Redfin

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