Unlike pandemic-2020, single-family investors captured more market share during Q2 2021 than at any time in the last 10 years.
Investor Activity in Single-Family Market Surged During Q2
Usually, investor activity in the single-family market is at its highest during the winter months when owner-occupied buyers tend to hibernate. By the time spring and summer roll around, owner-occupied buyers wake up and investors step back.
Not this year. By January 2021, investors woke up to their 2019 levels of engagement.
By the time May and June rolled around in 2021, investors were on their toes. Investors made almost a quarter of all their purchases during those two months.
All in all, the investor share of the single-family market accounted for 24.3% of all sales during Q2 2021, according to CoreLogic.
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Investor Purchases by Investor Sizes
Large investors, investors who retain 100+ properties, accounted for 20.2% of all single-family sales in June 2021. (In 2020, large investors made 11% of all sales and in 2019, they made 14% of single-family sales.
Small investors, investors who retain between 3 – 10 properties, accounted for approximately 47% of all sales in June.
Mid-sized investors, investors who retain 11-99 properties, represented approximately 32.1% of all sales.
Investor Purchases by Price Tiers
Historically, investors have been most actively involved with lower-priced single-family homes.
This year, however, investors increased their involvement in single-family homes in the top and middle price tiers compatible with respective metro price tiers. Investors purchased 21% of top tier homes and 23% of mid-priced homes in June 2021. This is up from 11% for both price tiers in June 2020.
Low price tiers also saw an increase, though less extreme, in investor purchases from 18% to 26% from June 2020 to June 2021.
Where Are Investors Buying?
Investors during Q2 2021 were focused on the South and Mountain-West regions of the country. Seven of the top 10 metros with the highest shares of investor activity were in the South and three of them were in the Mountain-West.
Why the South and Mountain-West? Both of these regions have high population growth, accelerating home price growth, and landlords have the upper hand in terms of tenant rights laws.
Top 10 Regions with Highest Investor Shares by Metro Areas in Q2 2021
- Memphis TX
- Atlanta GA
- Lubbock TX
- McAllen TX
- Brownsville TX
- Phoenix AZ
- Beaumont TX
- Salt Lake City UT
- Boise ID
- El Paso TX
Regions with Lowest Investor Shares by Metro Areas
- Hartford CT
- Lafayette LA
- Youngstown WV
- Rochester NY
- Syracuse NY
- Reading PA
- Pittsburgh PA
- New York NY
- Shreveport LA
Will Surge in Investor Activity in Single-Family Market Continue?
CoreLogic, like any good analytical prognosticator, covered its bases by indicating, “While possible, much like the recent record home price appreciation, it is likely that things will taper down. A three-month spike does not make a new normal, but when exactly it will end is difficult to predict.”
Thanks to CoreLogic.