Investors Are Taking Over Southern Housing Markets
Since the start of the COVID-19 pandemic, homebuyers have squared off against deep-pocketed investment firms looking to flip affordable single-family homes for resale or turn them into rentals. The largest investors flocked to southern states like Texas, where they accounted for 28% of all home sales in 2021, Realtor.com reports.
Other southern states like Georgia and Oklahoma also saw a rise in investor purchases at 19% and 18%, respectively. Southern investors made most of their purchases in housing markets already reporting substantial growth from migrating Americans, and institutional investors paid roughly 26% less for those homes than the median purchase price in the states where those properties were located.
“Homeownership is the primary source of wealth creation for many Americans,” says [Gay] Cororaton. “So if more and more institutional investors are purchasing the limited number of homes on the market, this means limited opportunities for regular folks to build wealth.”
Large investors are heading to areas that have larger millennial, renter, and minority populations and where lots of folks are coupling off to form new households. They also want to be in areas where residents have higher incomes and plenty of new folks are moving into the community. And they’re always looking for places where rents and prices for homes for sale are rising quickly but there isn’t a glut of rental housing—so they can turn a profit.