Graph showing housing investment rising

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Markets Most Affected by Investors

July 29, 2021

Investors are snatching up homes and are being blamed for contributing to the inventory shortages in several markets across the country. Investors are buying homes and then holding on to the properties, often turning them into rentals, and not returning very many homes back onto the market from their growing portfolios. Housing experts say that in some markets it's exacerbating housing shortages.

Investors have been blamed for taking away the most housing inventory in Phoenix; Charlotte, N.C.; Miami; Tampa, Fla.; and Chicago, according to a new analysis from realtor.com®. Overall, investors are contributing to the inventory shortage in 31 of the top 50 U.S. markets, the study shows.

“Today’s buyers are facing a tough market and data shows they aren’t just competing with each other,” says Danielle Hale, realtor.com®’s chief economist. “With deep pockets and more flexibility, investors can be daunting competition for the typical home buyer.”

In many markets, buying a home is attractive to investors, especially when home prices and rental prices are rising.

Realtor.com® researchers analyzed U.S. deed records from January 2000 to April 2021 to determine the number of investor sales versus purchases in the 50 largest U.S. markets.

Investors currently are buying more homes than they are selling. But they can contribute to inventory levels too. For example, investors are selling more homes than they are buying in about 19 markets of the 50 tracked, and replenishing the most number of homes for sale on the market in Atlanta, Dallas, Baltimore, Los Angeles, and San Francisco, the realtor.com® study shows. The markets where investors are contributing tended to post smaller inventory drops than markets where investors were holding on to properties longer, the study notes. But two notable exceptions are in Atlanta and Dallas, where inventory gaps have grown larger despite more investors selling.

“High home prices, slower rent growth, and uncertainty over the future of work in these markets are likely causing investors to re-evaluate their property portfolios in these areas,” Hale says. “And with homes still selling quickly, even in these metros, an investor deciding to sell can look forward to being able to reposition their dollars elsewhere in a very short period of time.”

Markets with net negative contributions to inventory

Markets with net positive contributions to inventory

 

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