As if record-high home prices weren’t enough, first time buyers are increasingly contending with competition from small-time (i.e. mom & pop) real estate investors, according to a recent report by Corelogic.
Also, according to the report:
Small or “mom-and-pop” investors—those who purchase 10 homes or fewer—have grown from 48% of all investor-purchased homes in 2013 to more than 60% in 2018.
Large investors—those who purchased more than 101 homes—nearly doubled their activity between 2000 and 2013. However, they’ve pulled back since the foreclosure crisis and now comprise about 15.8% of purchases, the report shows.
Medium-sized investors—those who purchase between 11 and 100 homes—have also gradually been decreasing their market share, falling from a peak of 30% in 2010 to 22.7% in 2018.
First-time buyers may be seeing more competition from investors. The share of starter homes purchased by investors peaked at one in five homes over the last two years, at a rate of 20.3% in 2017 and 2018, the report shows.
The markets with the highest investor activity in 2018, according to the report are:
- Detroit: 27% (investor purchase share)
- Philadelphia: 23.3%
- Memphis, Tenn.: 19.7%
- Long Island, N.Y.: 18.8%
- Oklahoma City: 18.7%
- Atlanta: 18.5%
- Des Moines: 17.2%
- Baltimore: 17.2%
- Camden, N.J.: 16.7%
- Cleveland: 16.7%