Investors bought a Shar record

(NASDAQ: RDFN) – The number of homes purchased by real estate investors in the first quarter fell 11.5% from the fourth quarter of 2021 and 16.5% from the third quarter of 2021, when investor purchases fell. reached an all-time high, according to a new+report by Redfin (www.redfin.com), technology-powered real estate brokerage. Still, investor buying remained above pre-pandemic levels, and investors bought a larger share of U.S. homes than ever before. They bought a record 20% of homes sold in the first quarter, down from 19.2% a quarter earlier and 15.3% a year earlier. A decrease in overall home purchases nationwide allowed investors to gain market share while buying fewer homes.

Redfin’s analysis is based on county records from 40 of the most populous US metropolitan areas and defines an investor as a buyer whose name includes at least one of the following keywords: LLC, Inc, Trust, Corp, Homes.

“Investor home purchases are falling for the same reason home purchases in general are falling: soaring interest rates and high house prices have made it more expensive to get a mortgage and buying a house,” said Redfin’s chief economist, Sheharyar Bokhari. “While around three-quarters of investor purchases are made in cash, investors are still affected by interest rates as they often take out loans to obtain this cash.”

“The fact that investors are still able to increase their market share while buying fewer homes indicates that they are not feeling the pain of rising interest rates as intensely as individual buyers, many of whom are completely excluded from the housing market,” Bokhari said. added. “It also indicates that people who can still afford to buy will continue to face competition from investors.”

The decline in investor buying over the past two quarters may indicate that investor buying has passed its peak and is returning to normal. Until the end of 2021, investor buying had been steadily climbing since the start of the pandemic, in defiance of normal seasonality. Meanwhile, overall home purchases hovered in typical seasonal fashion. It now appears that investor activity is getting back on track with the market as a whole.

Although investor purchases have slowed, they remain above pre-pandemic levels, in part because investors can rent out the homes they buy and profit from soaring+rents. Rental demand is high because there are not enough homes for sale and those that are for sale are often prohibitively expensive.

Investor buying has fallen in places like Atlanta and Jacksonville, where investors hold the largest share

The top 10 cities by investor market share all saw investor purchases decline in the first quarter. Investor purchases fell 25.3% quarter over quarter in Atlanta, where investors bought 33.1% of homes sold, the highest market share of any metro Redfin analyzed.

Top 10 US Metros by Investor Market Share: First Quarter 2022

Share of homes purchased purchased by investors in the first quarter of 2022 (market share)

QoQ variation of investor purchases

Atlanta, Georgia

33.1%

-25.3%

Jacksonville, Florida

32.3%

-21.7%

Charlotte, North Carolina

32.2%

-19.1%

Phoenix, Arizona

29.0%

-8.6%

Miami, Florida

28.2%

-3.6%

Las Vegas, Nevada

26.8%

-16.5%

Orlando, Florida

25.7%

-12.9%

Tampa, Florida

24.7%

-13.0%

Nashville, TN

24.6%

-16.5%

Columbus, Ohio

22.8%

-20.5%

Jennifer Bowers, a Redfin realtor in Nashville, said investors are pulling out of the market as they hope prices will drop.

“Investors are looking for offers. They are waiting for homes to stay on the market longer,” she said. “Also, they bought so many homes at the height of the pandemic that some pushback is natural. A few months ago, 95% of homes for sale in Nashville received at least one cash offer from an investor – one of my listings received eight. Today, most homes do not receive any. This is good news for regular buyers. While some of them will still engage in bidding wars with investors, they won’t necessarily have to give up all eventualities and bid astronomically above the asking price to compete.

Investors’ purchases of high and mid-priced homes decline while purchases of low-priced homes increase

Investors bought a record 25.3% of all low-priced homes purchased in metros tracked by Redfin in the first quarter, compared with 18.1% of mid-priced homes and 16% of high-priced homes.

Purchases of high-priced homes by investors fell 27.1% quarter over quarter in the first quarter. Purchases of mid-priced homes by investors also fell, down 19.1%. But purchases of low-cost homes by investors rose 8.3%. Typical property investors bought are $427,174, down from $425,298 a quarter earlier and $372,076 a year earlier.

Investor purchases of single-family homes fall 14%, more than any other type of property

Single-family homes remained the most popular property type with investors, accounting for 73% of purchases in the first quarter, while condos/co-ops accounted for 15.9%, townhouses 6.6% and multi-family properties 4 .5%. But purchases of single-family homes by investors fell 14.4% quarter over quarter, the most of any property type. Purchases of condos/co-ops and multi-family properties by investors also fell, falling 4.5% and 0.4%, respectively. The only property type that saw an increase was townhouses, with investor purchases climbing 1.5%.

To read the full report, including graphs, metro-level data and methodology, please visit: https%3A%2F%2Fwww.redfin.com%2Fnews%2Finvestor-home-purchases-q1-2022

About Redfin

Redfin(www.redfin.com) is a technology-driven real estate company. We help people find a home with brokerage, instant home buying (iBuying), rental, loan, title insurance, and home improvement services. We sell houses for more money and charge half the fees. We also run the #1 real estate brokerage site in the country. Our homebuyer clients see homes first with on-demand viewings, 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 renovation team repair their home to sell for the best price. Our rental business helps millions of people across the country find apartments and houses for rent. Since launching in 2006, we’ve saved our clients over $1 billion in commissions. We serve more than 100 markets in the United States and Canada and employ more than 6,000 people.

For more information or to contact a local Redfin 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, email [email protected]. To see Redfin’s press center,

See the source version on businesswire.com: https://www.businesswire.com/news/home/20220615005369/en/

About Adam Motte

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