Institutional investors and all-cash buyers are driving the housing market.
Institutional investors accounted for 14% of all sales in September, according to RealtyTrac’s latest residential & foreclosure sales report.
This is up from 9% in August, and 9% a year ago.
In metros with a population of 1 million or more, Atlanta had the highest percentage of institutional investor purchases at 29%. Las Vegas, St. Louis, Jacksonville, and Charlotte rounded off the top five.
Meanwhile, all-cash purchases represented 49% of all residential sales, up from 40% in August, and 30% a year ago.
“The housing market continues to skew in favour of investors, particularly deep-pocketed institutional investors, and other buyers paying with cash,” Daren Blomquist, vice president at RealtyTrac said in a press release.
“While the institutional investors are pulling back their purchases in many of the higher-priced markets — places like San Francisco, Washington, D.C., New York, Seattle and Sacramento — they are continuing to ramp up purchases in markets where median prices are still below $US200,000 — places like Jacksonville, Atlanta, Charlotte, St. Louis and Dallas.”
Miami saw the highest percentage of all-cash sales at 69%. Tampa, Jacksonville and Orlando also saw a surge in all-cash sales. Last month we spoke to a couple in Florida that had lost out to all-cash offers. Outside of Florida, Las Vegas also saw a high percentage of all-cash sales at 62%.
Institutional investor purchases also increased in states with higher distressed inventory. “Institutional investor purchases have rebounded in Las Vegas corresponding to a recent rebound in foreclosure activity there,” said Blomquist.