With economic uncertainties abound, the real estate market has seen an increase in the number of institutional homebuyers, defined as companies, corporations or limited liability companies (LLCs) by the National Association of REALTORS®. According to NAR’s “Impact of Institutional Buyers on Home Sales and Single-family Rentals” report, in 2021, institutional buyers made up 13.2% of residential property purchases in the U.S., up from 11.8% in 2020.
More findings from the report on this trend:
- On average, institutional buyers paid 26% less than states’ median average home sale prices.
- 56% of REALTORS® said sellers sold to institutional investors due to all-cash offers or “as-is” sales.
- The states with the highest shares of institutional buyers were:
- Texas — 28%
- Georgia — 19%
- Oklahoma — 18%
- Alabama — 18%
- Mississippi — 17%
- Intent for the property’s return to market largely consisted of two categories: a “flip” of the home (45%) and as rental units (42%).
- 56% of REALTORS® said sellers sold to institutional investors due to all-cash offers or “as-is” sales.
- Of these properties that were converted to rentals, 52% of REALTORS® reported institutional investors typically asked for higher rent for the same quality of property.
- But with these higher rents comes better service—75% of REALTORS® reported the same or faster service by corporate landlords than mom-and-pop landlords.
For more information and to read the entire report, visit NAR.realtor/impact-of-institutional-buyers-on-home-sales-and-single-family-rentals.
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