Institutional buyers are flooding single-family market

Dropped record $77B on homes in past 6 months, according to Redfin

National /
May.May 21, 2021 12:15 PM
(iStock)

(iStock)

UPDATED, May 24 2021, 12:00 p.m.: Institutional buyers are in spending mode.

Investors dropped a record $77 billion on homes in the past six months, according to Business Insider, citing a Redfin report. That compares to the $55 billion spent on homes in the second and third quarters of 2020, when buying dropped as Covid cases surged and cities imposed restrictions.

Overall, the number of homes acquired by investors jumped 2.7% in the first quarter compared to the same period last year.

The massive purchases have added to the nationwide housing crunch amid what has been a red-hot market.

Investors are most focused on single-family homes, which made up the biggest share of acquisitions and first-quarter growth, year over year. Nearly 39,000 of the 55,000 homes investors bought in Q1 were single-family properties, up 4.8% from last year.

Among the investors cited in the Redfin report were Invitation Homes and American Homes 4 Rent, both single-family-rental behemoths. Redfin’s report also included iBuyer Opendoor snapped up 3,594 homes in Q1, Business Insider reported. Others like Offerpad and Zillow, have taken to gobbling up houses, sight unseen.

Small real estate companies and individuals looking to flip properties accounted for a portion of investors in cities like Miami, Atlanta, Las Vegas, Phoenix, and Charlotte, North Carolina.

Redfin chief economist Daryl Fairweather said he expects the buying momentum to accelerate.

“Investors took a huge pause during the pandemic, and they still haven’t made up for all the homes they didn’t purchase during that period,” she told the publication.

With a larger institutional presence, an already tight housing market could grow tighter. Single-family-rental companies can also overshadow smaller buyers with all cash deals and a more aggressive approach to closing.

[BI] — Suzannah Cavanaugh

Correction: An earlier version of this story stated that Opendoor bought 55,000 homes in Q1; the company bought 3,594 homes.





    Related Articles

    arrow_forward_ios
    Sean “P. Diddy” Combs, DJ Khaled, Trippie Redd, Lil Wayne, Rick Ross and Kodak Black (Getty, iStock, Illustration by Shea Monahan for the Real Deal)
    South Florida’s rapper resi market is super dope fire
    South Florida’s rapper resi market is super dope fire
    A photo illustration of a crystal ball predicting future home prices (iStock)
    Home sales, building to slow: Fannie Mae
    Home sales, building to slow: Fannie Mae
    Zillow economist Nicole Bichaud (Zillow, iStock)
    Where have home values grown more, suburbs or cities? The answer may surprise you
    Where have home values grown more, suburbs or cities? The answer may surprise you
    Eric Wu, CEO and co-founder, Opendoor (Opendoor, iStock)
    Opendoor stock soars on first profitable quarter
    Opendoor stock soars on first profitable quarter
    National Association of REALTORS' Charlie Lee (LinkedIn, iStock, Illustration by Kevin Cifuentes for The Real Deal)
    NAR catches break in one antitrust lawsuit
    NAR catches break in one antitrust lawsuit
    Eddie Lim, co-founder and CEO, Point (Getty Images, iStock)
    Home equity financing startup Point raises $115M Series C
    Home equity financing startup Point raises $115M Series C
    Virginia (Google Earth)
    Virginia listing sabotaged by squatter living in basement
    Virginia listing sabotaged by squatter living in basement
    Redfin's Glenn Kelman (iStock) Settlement, Lawsuit
    Redfin settles redlining lawsuit for $4M
    Redfin settles redlining lawsuit for $4M
    arrow_forward_ios

    The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

    Loading...