RealtyTrac® Data Shows Increase in Share of Real Estate Investor Purchases

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More Investors Paying with Cash, But Pricing Discounts Decline

Real estateinvestor purchases accounted for 16.4% of all home purchases nationally in Q3 2021 compared with 11.7% in Q3 2020, a year-over-year increase of just over 40 percent, according to the RealtyTrac^® Investor Purchase Report. The report measures the share of all single-family home sales purchased by investors, the average price discount of investor-purchased properties, and the share of all-cash sales. Investors purchase single-family homes in order to fix and flip the properties, or convert them into long-term rentals.

The increase in investor purchase activity was national in scope – all but five states saw increases in the percentage of investor purchases among all home sales from Q3 2020 to Q3 2021. Alaska, Delaware, Iowa, Nebraska and Vermont were the only states to show a decrease in real estate investor purchases during that period.

“The share of investor purchases continues to rise in the vast majority of states,” said RealtyTrac Executive Vice President Rick Sharga. “Despite historically low inventory of homes for sale, and historically high prices, both fix-and-flip and rental property investors continue to be very active in the residential market.”

Investor Purchase Share for Q3 2021

Top Ten States with Highest RE Investor Purchase Share
	Q3 2021 Investor Purchase Share
Arizona	26.6%
Georgia	25.2%
Arkansas	23.5%
Florida	23.1%
Mississippi	22.7%
Nevada	22.1%
North Carolina	21.8%
New Hampshire	21.2%
Missouri	19.7%
Delaware	18.5%
Top Ten States with Lowest RE Investor Purchase Share
	Q3 2021 Investor Purchase Share
Vermont	0.5%
Alaska	1.3%
South Dakota	7.1%
New Mexico	7.4%
Montana	8.1%
Idaho	8.3%
Wyoming	8.5%
Oregon	9.0%
West Virginia	9.5%
Washington	9.7%
Source: ATTOM Data Solutions, RealtyTrac analysis

The RealtyTrac report, citing home sales data from ATTOM Data Solutions, also shows that investors across the country paid an average of 18.9% less than the overall median sale price in Q3 2021, with a median purchase price of $245,000 for investors compared to $302,000 for all home purchases. This average price discount is significantly lower than the discount in Q2 2021 when investors paid an average of 29.4% less.

The states with the highest average price discounts for investor properties as of Q3 2021 include:

Arkansas: 76.7% discount
West Virginia: 60.0% discount
Michigan: 59.5% discount
Louisiana: 51.5% discount
Delaware: 47.9% discount

Investors continue to pay with cash in a majority of cases, with the share of all-cash purchases among investors increasing. In Q3 2021, 79.0% of all investor purchases were cash sales compared with 69.5% in Q3 2020, a year-over-year increase of 9.5 percentage points. Cash purchases accounted for more than 50% of all investor purchases in every state, other than Alaska, Wyoming and the District of Columbia.

“As mortgage rates rise, investors benefit even more by being able to execute all-cash purchases,” Sharga noted. “Rising home prices and inflation make it difficult for investors to achieve their ROI objectives, but they make it even harder for the average consumer to afford to buy a property. So even though investor profit margins may be declining, it’s possible that we’ll continue to see the investor share of purchases increase over the next few quarters.”

Full state-level data is available in the Winter 2022 RealtyTrac Investor Purchase Report.

About RealtyTrac

Founded in 1996, RealtyTrac publishes the largest database of foreclosure property information in the U.S. along with other real estate and mortgage data used by real estate investors and professionals to find, analyze and purchase residential and commercial distressed properties. RealtyTrac is owned and operated by ATTOM Data Solutions, a leading provider of publicly recorded tax, deed, mortgage and foreclosure data as well as proprietary neighborhood and parcel-level risk data for more than 150 million U.S. properties. For more information, visit www.RealtyTrac.com.