Mom-and-pop investors pick up slack in local housing markets


 By DON FENLEY

Most of the time national housing trends don’t jibe with what’s happening locally. ReatyTrac’s Q1 Cash, Investor and Distressed Sales Report is an exception to that norm.

“The first quarter sales data broken down by owner-occupancy status suggest two important trends in the housing market: first, investor activity continues to represent a disproportionately high share of all home sales activity in this housing recovery, but unlike the past three years the large institutional investors are backing out while the smaller, mid-tier and mom-and-pop investors are remaining active,” said Daren Blomquist, vice president at RealtyTrac.

“The second trend is that a growing number of investors are not buying all-cash, but instead are taking advantage of the broader set of financing options now available to them thanks to a new crop of nationwide companies that have emerged offering financing specifically for investment properties.”

Owner-occupied purchases

Owner occupiedAccording to the report, owner-occupant buyers accounted for 63.2% of all residential single-family home and condo sales in the first quarter of 2015, down from 68.6% a year ago to the lowest quarterly level going back to the first quarter of 2011, the earliest quarter with data available.

Local numbers track with the national numbers with two exceptions – Greene and Johnson counties. Investor purchases in those counties outpace those in the other local counties.

Non-owner occupied purchases

Non owner-occupant buyers reached a new high of 36.8% in Q1, the highest level since the first quarter of 2011. In the universe of non-owner-occupied purchases, 44.7% were to all cash buyers, down from 61.0% a year ago.

Investor purchases

InstutionalRealtyTrac identifies institutional investors as those who have purchased 10 or more properties in the past 12 months. A non-institutional buy is counted as a non-owner-occupied purchase.

Washington Co. TN’s market continued to attract the most institutional investors during the first three months of this year, but when the focus shifts to
all investors Johnson Co. has the highest portion of home sales.

All investorsThere wasn’t a lot of change on the year-to-year metric with two exceptions – Washington Co. VA and Washington Co. TN.

All-cash purchases reach four-year low

Nationally, all-cash buyers accounted
for 25.9 percent of all single family home and condo sales in the first quarter of 2015, down from 30.3 percent in the fourth quarter of 2014 — a four-year low.

cash salesAll-cash sales in local county markets declined in six of the nine counties monitored by the report.

 

Report methodology

The RealtyTrac U.S. Cash, Investor and Distressed Sales Report provides percentages of all sales that are sold to investors, institutional investors and cash buyers, by state and metropolitan statistical area.  The data is derived from recorded sales deeds and loan data. Statistics for previous quarters are revised when each new quarterly report is issued as more deed data becomes available for those previous months.

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