Investors’ Home Purchases Total $1 Trillion Since 2011

Investors’ Home Purchases Total $1 Trillion Since 2011

10/28/2013 BY: KRISTA FRANKS BROCK

Since 2011, investors have purchased more than 950,000 homes; and with 370,000 purchases so far this year, they have already surpassed the number of purchases they made in either of the past two years, according to a new report from RealtyTrac.

In total, investors spent $1 trillion on home purchases since 2011, according to RealtyTrac’s first-ever Investor Insight report released Monday, titled Real Estate Investor Purchase and Finance Patterns: 2011 to 2013.

RealtyTrac noted more than half of investor buys were all-cash purchases, and the percentage goes up dramatically when considering investor entities that purchased at least 1,000 homes since 2011.

In fact, RealtyTrac pointed out several differences in buying activity between smaller and larger investors.

While 54 percent of all investor purchases were made with cash, 93 percent of purchases made by investors that bought at least 1,000 properties since 2011 were cash buys, the company reported.

The status and characteristics associated with the properties acquired also varied somewhat depending on whether the investor was a more prolific purchaser.

Overall, 54 percent of homes purchased by investors were underwater but not in foreclosure, compared with 37 percent of homes purchased by investors that bought at least 1,000 properties.

On the other hand, larger investors purchased more homes in foreclosure. About 36 percent of homes purchased by large investors were in foreclosure, compared with 24 percent of total investor purchases, according to RealtyTrac’s data.

Twenty-three percent of all investor purchases were regular equity sales, whereas 27 percent of homes purchased by investors making at least 1,000 purchases were your traditional equity sales.

While more than half of investor purchases over the past few years—57 percent—have already been resold, larger investors appear to be holding onto their properties for the time being.

Among investors that have purchased 100 properties or more in the past few years, the percentage of homes that have been resold drops to 25; and among investors that have purchased 1,000 or more properties, the resold share drops to a meager 1 percent, according to RealtyTrac.

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