Investors take bigger bite of US housing, and pay less

Investors aren’t only grabbing more than their usual share of the U.S. homebuying market, but also paying less.

The RealtyTrac Investor Purchase Report found investors were responsible for 15.4 percent of home purchases during the second quarter, a 34 percent jump from the same period last year.

Investors’ share of purchases across the country decreased slightly from the 15.9 percent recorded in the previous quarter, but remained at the higher end of the typical range.

Investor purchases increased from the same time last year in 44 of the 50 states.

New Hampshire led the way, with investors accounting for 23.2 percent of home purchases in the second quarter. Delaware and Georgia ranked second and third. Florida was sixth at 19.6 percent.

On the other end of the scale, investors accounted for only 0.8 percent of purchases in Vermont, the lowest in the nation. Alaska was the only other state where investors accounted for less than 2 percent of home purchases in the second quarter.

What’s more, the prices investors are paying would make some consumers burn.

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The median purchase price for investors in the second quarter was $205,000, which was 29.4 percent below the $290,230 median price for all home purchases in the quarter, according to the report. California was one of the few states where investors paid more than the median, by an average of 3.3 percent.

Meanwhile, in several states investors pounded the low end of the market, nowhere more than in Arkansas, where they paid 77 percent less than the median.

One of the reasons investors are paying less is their ability to pay cash for properties, which allows for faster closings. In the second quarter, 79 percent of investor home purchases were all-cash, up 10 percentage points year-over-year.

Additionally, investors often hunt for discounts on the housing market, often to make improvements and re-sell or rent out the homes.

“Successful investors tend to look for below-market pricing in order to make a profit on their purchases,” said Rick Sharga, executive vice president of RealtyTrac and author of the report.