Investors bought nearly half all Bexar homes sold in 2021

Investors bought nearly half all Bexar homes sold in 2021

Investors snapped up nearly half the homes sold in the San Antonio area last year, drawn to rising populations, prices and rents. That meant more competition for prospective buyers in a market where demand was already outpacing the supply of homes for sale.

That was higher than 41 percent of sales in Travis County, where Austin is the county seat; 38 percent in Harris County, where Houston is the county seat; and 43 percent in Dallas County. In Tarrant County, where the county seat is Fort Worth, about 52 percent of homes sold last year went to investors.

San Antonio’s rapidly growing population and relatively affordable prices compared with other major Texas cities are making it attractive to investors, said Gay Cororaton, senior economist and director of housing and commercial research at the Realtors association.

Real estate is drawing investors seeking alternatives to volatility in the stock market, rising interest rates and higher inflation. Many are converting the homes to rentals, which provides more of a “hedge” against those factors, she said.

The Realtors association used property records from data firm Black Knight to estimate the market share of institutional buyers to total home sales. It defined such buyers as companies, corporations or limited liability companies.

Nationally, it found investors bought 13.2 percent of homes sold last year, up from 11.8 percent in 2020. The median price they paid was generally 26 percent lower than the state median prices.

The share of such buyers increased in 84 percent of states. The highest share was in Texas, at 28 percent, followed by Georgia at 19 percent, Oklahoma at 18 percent and Alabama at 18 percent.

More people are moving to Sun Belt cities, home prices and rents are rising, and vacancy rates are lower, which is attractive to investors, Cororaton said.

“This is happening in the context of a very tight housing market,” she said. “Given supply conditions already, the entry of institutional buyers is just piling up more walls and challenges for first-time buyers to get their foot in the door of homeownership.”

During the coronavirus pandemic, inventory plummeted and home prices and rents soared.

Investors tend to buy homes in growing areas with strong housing and rental markets, rising household formation, and higher incomes and concentrations of millennials, renters and residents of color, according to the report.

There were twice as many Black families in counties with a higher share of corporate buyers than the national average as there were in counties with fewer such buyers, it reported.

The association surveyed about 3,644 real estate agents and found that homeowners sold to investors because they offered cash and bought property “as is.”

About 76 percent of respondents said they saw more investors in their markets in 2021 compared to three years ago, and 42 percent said those buyers usually acquired homes needing rehabilitation.

Of the homes bought, respondents said about 42 percent were rented out and 45 percent were resold.

Investors buying homes “takes away available stock for homeowners,” but building more single-family rental homes “adds to the rental housing stock,” the Realtors association report said.

“We have a housing shortage,” Cororaton said.

She expects institutional buyers to purchase more properties because interest rates and inflation are still rising and there’s plenty of demand for housing, particularly among millennials.

“I think for the next two years at least we will continue to see an increase in institutional buyer share,” she said.

madison.iszler@express-news.net

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