All-cash, institutional investor home sales down in Q1- Sullivan Co. sees major drop

The number of all-cash and institutional investor home sale were down during the first three months of the year in most Tri-Cities area counties.

Sullivan County had the most dramatic reductions in both categories. That’s likely driven by rental market conditions in a county where a significant number of apartments are coming online this year and where purchases for rentals has been high. Rents are also trending lower across the region as the supply of rental units increase. The balancing factor is although rents are trending lower and the supply is increasing the most current return on investment numbers remain favorable.

ATTOM Data Solution’s Q1 Homes Sales Report shows there were 647 cash sales on single-family and townhomes in the local market, compared to 781 during the first three months of last year. But that drop is nothing compared to Q4 2016 when there were 1,100 cash sales.

The most surprising number came from Sullivan County where cash sales dropped from 390 in Q4 to 16 during the first three months of this year. That aligns with institutional investor sales. They dropped from 16 last year to zero this year. Across the region, institutional investor sales dropped from 50 during Q1 last year to 18 this year. Institutional Investor sales are defined as residential property sales to non-lending entities that purchased at least 10 properties in a calendar year.

Although local cash sales were down, they still account for a significant share of total sales. And the local share in each market is higher than the national share.

Nationwide, all-cash sales represented 30% of all single family and condo sales in Q1, up from 29.1% in the previous quarter but down from 32.1% in Q1 2016. The 30% share in the first quarter was well below the peak of 44.7% in Q1 2011 but was still above the pre-recession average of 20.4% from Q1 2000 to Q3 2007.

Here’s how Q1 all-cash sales and their market share looked in local markets.

Carter Co. – 78 sales, 46.4% share.

Greene Co. – 132 sales, 46% share.

Hawkins Co. – 101 sales, 49% share.

Johnson Co. – 39 sales, 57.4% share.

Sullivan Co. – 16 sales, 47.1% share.

Unicoi Co. – 31 sales, 50.8% share.

Washington Co. – 187 sales, 34.8% share.

Bristol, VA – 19 sales, 31.1% share.

Washington Co. VA – 44 sales, 40.4% share.

There were 18 local sales to institutional investors during Q1, down from 50 Q1 last year. Here’s a capsule look at those sales by market:

Carter Co. three sales, down nine sales.

Greene Co. – one sale down six sales.

Hawkins Co. – five sales, up one sale.

Johnson Co. – two sales, same as last year.

Sullivan Co.- Zero sales, down 16 sales.

Unicoi Co. – zero sales, down from one sale.

Washington Co. – five sales, down from 10 sales.

Bristol VA – one sale up from zero last year.

Washington Co. VA – one sale, same as last year.

The ATTOM Data Solutions U.S. Home Sales Report is based on data derived from recorded sales deeds, foreclosure filings, and loan data. Statistics for previous quarters are revised when each new report is issued as more deed data becomes available.


1 reply

  1. The downward trend of cash sales is good as it seems to correlate with the fewer foreclosure sales and declining foreclosure inventory back to normal pre great recessions levels. With the cleaning out of the foreclosure pipe line it will remove that negative element from the regional real estate market as a purchase option competing for the lowest price and allow home buyer and sellers to focus on open market transaction strengthening demand and moving home price values upward as has been the trend in recent months. This is all good news for the regional real estate industry.