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Institutional Investors Reach Seven-Year High in Home Purchases

According to ATTOM, sellers earned a profit of $94,092 on the typical home sale in 2021, up 45% from $64,931 in 2020, and up 71% from $55,000 in 2020.

Institutional investors accounted for 6.9% (one of every 14) single-family home and condo sales nationwide in 2021—the highest level since 2013, and up from 2.7% in 2020, and 3.6% in 2019.

And if you were looking to garner profit off the sale of a home in 2021, California was the place to sell, populating six of the top 10 spots on the list. Christine Stricker, Senior Marketing Manager for ATTOM Data Solutions, notes that among those metros with at least one million people, the top 10 areas that saw the largest dollar gains from home sales in 2021 included:

  • San Jose-Sunnyvale-Santa Clara, California ($575,000 gain);
  • San Francisco-Oakland-Hayward, California ($462,000 gain);
  • Los Angeles-Long Beach-Anaheim, California ($267,500 gain);
  • Seattle-Tacoma-Bellevue, Washington ($264,606 gain);
  • San Diego-Carlsbad, California ($262,000 gain);
  • Sacramento–Roseville–Arden-Arcade, California ($200,000 gain);
  • Riverside-San Bernardino-Ontario, California ($180,000 gain);
  • Boston-Cambridge-Newton, Massachusetts-New Hampshire ($180,000 gain);
  • Portland-Vancouver-Hillsboro, Oregon-Washington ($176,000 gain); and
  • Denver-Aurora-Lakewood, Colorado ($175,000 gain).

ATTOM’s year-end 2021 home sales report found the largest increases in investment returns on typical home sales in 2021 were found in the following five locations:

  • Salisbury, Maryland (margin up 267.2%);
  • Lafayette, Louisiana (up 227.4%);
  • Montgomery, Alabama (up 195.4%);
  • Mobile, Alabama (up 179.9%); and
  • Augusta, Georgia (up 167.7%).

The report also noted that among metro areas with a population of at least one million in 2021, the largest return-on-investment (ROI) increases from 2020 to 2021 were recorded in the following five metros:

  • Raleigh, North Carolina (ROI up 80.6%);
  • Oklahoma City, Oklahoma (up 64.4%);
  • Virginia Beach, Virginia (up 62.6%);
  • Washington, D.C. (up 60.2%); and
  • Chicago, Illinois (up 59.4%).

Overall, profits rose in more than 90% of the markets analyzed by ATTOM and the latest figure, based on median purchase and resale prices, marked the highest level in the U.S. since 2008.

For a decade now, both raw profits and ROI have improved nationwide, and last year’s gain in ROI–up nearly 12 percentage points–was the largest annual increase since 2013. The year-end 2021 analysis also showed that profits shot up as the national median home price rose 16.9% in 2021 to $301,000, another annual record.

Of these sales, cash sales were on the rise, with all-cash purchases accounting for 30.3%, or one of every three single-family house and condo sales in 2021–the highest level since 2015. The report noted the latest figure was up from 22.8 percent in 2020 and from 25 percent in 2019, although still off the 38.5 percent peaks in 2011 and 2012.

About Author: Eric C. Peck

Eric C. Peck has 20-plus years’ experience covering the mortgage industry, he most recently served as Editor-in-Chief for The Mortgage Press and National Mortgage Professional Magazine. Peck graduated from the New York Institute of Technology where he received his B.A. in Communication Arts/Media. After graduating, he began his professional career with Videography Magazine before landing in the mortgage space. Peck has edited three published books and has served as Copy Editor for Entrepreneur.com.
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