RealtyTrac Investor Purchase Report – Winter 2022

The RealtyTrac® Investor Purchase Report analyzes home sales data from ATTOM Data Solutions to determine the share of single-family home sales purchased by investors as both fix-and-flip properties and long-term rentals; the
average price discount of investor-purchased properties; and the share of all-cash sales among investor purchases. The data, which is analyzed quarterly at both the national and state level, reveals the following trends.

As of Q3 2021 >

• Nationally, the share of real estate investor purchases among all home sales increased year over year by just over 40 percent.
• Increased investor purchase activity was nationwide: all but five states saw increases in the percent of investor purchases of single-family homes year over year.
• The median price paid by investors across the country was 18.9% less than the overall median home sale price in Q3 2021.
• Investors continue to pay with cash in a majority of cases, with the share of all-cash purchases among investors increasing.

Share of Real Estate Investor Purchases Increases Year Over Year

The share of single-family real estate investor purchases accounted for 16.4% of all home purchases nationally in Q3 2021 compared with 11.7% in Q3 2020, a year-over-year increase of 4.7 percentage points.

Share of Investor Purchase Activity Among All Home Sales

“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, Executive Vice President – RealtyTrac

The increase in investor purchase activity was truly national in scope – all but five states saw increases in the percent of investor purchases among home sales from Q3 2020 to Q3 2021. Alaska, Delaware, Iowa, Nebraska and Vermont were the only states to show a decrease in real estate investor purchases during that period.

While Investors Continue to Pay Less Than Consumers, the Average Price Discount Declined Significantly

The median price paid by investors across the country was, on average, 18.9% less than the overall median sale price in Q3 2021. Investors paid a median purchase price of $245,000, compared to a median price of $302,000 for all home purchases. This average price discount is significantly lower than the discount in Q2 2021 when investors paid an
average of 29.4% less.

The states with the highest average price discounts for investor properties as of Q3 2021 include:

Share of All-Cash Purchases Among Investors Increasing

Investors continue to pay with cash in a majority of cases, with the share of all-cash purchases among investors
increasing. In Q3 2021, 79.0% of all investor purchases were cash sales compared with 69.5% in Q3 2020, a year-over-year increase of 9.5 percentage points. Cash purchases accounted for more than 50% of all investor purchases in every state, other than Alaska, Wyoming and the District of Columbia.

As mortgage rates rise, investors benefit even more by being able to execute all-cash purchases. Rising home prices and inflation make it difficult for investors to achieve their ROI objectives, but they make it even harder for the average consumer to afford to buy a property. So even though investor profit margins may be declining, it’s possible that we’ll continue to see the investor share of purchases increase over the next few quarters.” Rick Sharga, Executive Vice President – RealtyTrac

Methodology

Residential home sales data is sourced from ATTOM Data Solutions and does not include commercial, public, agriculture/farming, industrial or vacant land. It also does not include arms-length transactions or quit claims. A property is considered an investor purchase if the owner type on the transaction is listed as “Company.” If less than 50% of transactions for a state include the transaction amount, the amounts are excluded, showing “No Data.”

About RealtyTrac

Founded in 1996, RealtyTrac publishes the largest database of foreclosure property information in the U.S. along with other real estate and mortgage data used by real estate investors and professionals to find, analyze and purchase residential and commercial distressed properties. RealtyTrac is owned and operated by ATTOM Data Solutions, a leading provider of publicly recorded tax, deed, mortgage and foreclosure data as well as proprietary neighborhood and parcel-level risk data for more than 150 million U.S. properties. For more information, visit www.RealtyTrac.com.

Rick Sharga is the Executive Vice President of RealtyTrac, a leading foreclosure search and discovery website used by real estate agents and investors. One of the country’s most frequently-quoted sources on real estate, mortgage and foreclosure trends, Rick has appeared regularly over the past 15 years on CNBC, the CBS Evening News, NBC Nightly News, CNN, ABC World News, FOX, Bloomberg and NPR. Rick is a founding member of the Five Star National Mortgage Servicing Association, a member of the Board of Directors of REOMAC, and was included in the Inman News Inman 100, an annual list of the most influential leaders in real estate in both 2013 and 2014.