The share of single-family home sales purchased by investors as both fix-and-flip properties and long-term rentals rose just over 40% year over year during the third quarter of 2021, according to a report by RealtyTrac released on Tuesday. The report is based on home sales data from ATTOM Data Solutions.
Investor purchases accounted for 16.4% of all home purchases nationwide in Q3 compared with 11.7% a year prior. All but five states saw increase in the percent of investor purchases of single family homes year over year. Alaska (-1.30%), Delaware (-18.50%), Iowa (-10.51%), Nebraska (11.71% compared to 16.05% in Q3 2020) and Vermont (-0.53%) were the only states to show a decrease in real estate investor purchases during the third quarter.
The states with the highest investor share purchase during Q3 2021 were Arizona (26.6%), Georgia (25.2%), Arkansas (23.5%), Florida (23.1%) and Mississippi (22.7%). While Vermont (0.5%), Alaska (1.3%), South Dakota (7.1%), New Mexico (7.4%) and Montana (8.1%) had the lowest share of investor purchased homes.
“The share of investor purchases continues to rise in the vast majority of states. 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,” Rick Sharga, the executive vice president of RealtyTrac said in a statement.
The median price they paid across the country was 18.9% less than the overall median home sale price in the third quarter of 2021. This average price discount is significantly lower than the discount of 29.4% in the previous quarter. They paid a median purchase price of $245,000. The states with the highest price discount for investor properties in the third quarter were Arkansas, West Virginia and Michigan.
The majority of investors are paying for their properties with cash and the share of all-cash purchases among investors is increasing. During the third quarter of 2021 79.0% of all investor purchases were cash sales compared with 69.5% a year before. Cash purchases accounted for more than 50% of all investor purchases in every state other than Alaska, Wyoming and the District of Columbia.