Purchases by real estate investors accounted for 15.4% of all home purchases nationwide in the second quarter, up from 11.5% in the second quarter of 2020, according to the real estate information company. RealtyTrac reported Thursday.
At the state level, the percentage of year-over-year investor purchases among all home sales increased in all states and the District of Columbia except Alaska from Louisiana, Maryland, Nebraska, Vermont and West Virginia.
The increases, while notable, do not reflect a significant change in direction for investor buying activity, RealtyTrac Executive Vice President Rick sharga said in a statement.
âHistorically, investors have always accounted for between 10% and 15% of residential home purchases, and our data shows that is still the case today, albeit at the higher end of that range,â said Sharga .
“But the data does not support the ‘Wall Street buys Main Street’ theme which has been a popular theory for about a year.”
Home buyers pay less
The RealtyTrac report, which cited home sales data from ATTOM Data Solutions, also showed that investors across the country paid on average 29.4% less than consumers in the second quarter, with a price of median purchase of $ 205,000 for investors versus $ 290,230 for all home purchases. .
Among the 38 states with complete reporting data for this measure, including the District of Columbia, investors paid less than the state’s median selling price in all but five states, in which they paid at least the state median:
- Vermont: 34% average premium over state median.
- California: average premium of 3.3%.
- Massachusetts: average premium of 3%.
- Washington: average premium of 1%.
- Nevada: On average, the same as the state’s median selling price.
âAnother misconception is that investors pay too much for properties, making it difficult for consumers to compete and artificially pushing up prices,â Sharga said. “But successful investors tend to seek prices below the market in order to make a profit on their purchases.”
Many investors buy properties for cash, which gives them the opportunity to get properties at a discount, he said.
In the second quarter, 79% of all investor purchases were spot sales, up from 69% a year earlier. Cash purchases accounted for more than half of all investor purchases in all states, including the District of Columbia, except Alaska.
This compares to the second quarter of 2020, when cash purchases accounted for more than half of all investor purchases in just 41 states, with 10 states having less than 50% of cash purchases.
See the gallery for the top 10 states with the highest share of real estate investor purchases.
– In connection with ThinkAdvisor: