Real Estate Marketing & Beyond
Institutional investors in the U.S. are snapping up as many homes as they can possibly find, but even then, it’s not enough, as high demand continues to outpace supply.
A report from Redfin shows that investors bought up 18.4% of all homes for sale in the U.S. in the fourth quarter, amounting to a record high share of the market.
Investors see a big opportunity to turn homes for sale into rentals amid sky-high demand. With demand for rental so high, investors believe there’s big potential to drive long-term profits in the sector. Additionally, other investors see an opportunity to do up homes and flip them at higher prices, taking advantage of home price growth and the demand for premium amenities.
Investors are snatching up the highest amount of properties in Atlanta, Charlotte, N.C., and Jacksonville, Fla.
According to Redfin’s data, investors snapped up a total of 80,293 homes in the fourth quarter, up 44% from a year ago. However, they’d likely buy even more if additional homes were available.
“We wish we could buy more,” Invitation Homes Chief Executive Dallas Tanner told CNBC in an interview. He revealed his company bought 1,500 homes in the fourth quarter and that it will hold onto them over the long haul as it looks to expand its portfolio of rental properties.
“Demand is so large,” Tanner added.
Redfin economist Sheharyar Bokhari said record high home prices are the main reason why investor demand is so strong. The prices are an incentive for those who’re planning to rent out the homes they purchase, he explained.
“Investors are chasing rising prices because rental payments are also skyrocketing,”Bokhari said. “The supply shortage is also an advantage for landlords, as many people who can’t find a home to buy are forced to rent instead. Plus, investors who ‘flip’ homes see potential to turn a big profit as home prices soar.”
