If you put a home on the market today, chances are a company will try to buy it instead of someone wanting to move in.
Investors bought about 30% of all single-family homes in the Dallas-Fort Worth area last year, according to research by national housing analyst John Burns Real Estate Consulting.
These buyers accounted for 50,526 of the 169,606 purchases of new homes and resale homes in the city area, the firm found.
Investors had a larger share in the Fort Worth-Arlington metro division than in the Dallas area, accounting for about 33% of all home purchases last year. In the Dallas-Plano-Irving metro division, investors represented approximately 28% of sales.
They range from mom-and-pop owners and flippers to large companies like Dallas-based Invitation Homes and Las Vegas-based AMH (formerly American Homes 4 Rent) that have acquired tens of thousands of rental properties across the country since the 2008 recession.
“Investors want to own real estate in markets like Dallas, which performed well during the global financial crisis and are also becoming more diversified in the types of jobs they attract,” said Bryan Lawrence, a vice president in Dallas with John Burns Real Estate Consulting.
John Burns’ research also includes iBuyers such as Opendoor which offer to buy homes directly from sellers and resell them after carrying out light repairs. Their share of the U.S. and local housing market has declined over the past couple of quarters, according to the housing analyst. Two of the best-known players in the space, Zillow Group and Redfin, closed their iBuying operations in 2021 and 2022.
Home investment activity grew in North Texas during the pandemic as home values rose, peaking in the first quarter of 2022. Since the peak, many investors have stalled as interest rates and property taxes rose while home prices continued to rise.
Companies looking to rent out homes have struggled to put money to work as experts expect rent growth to slow, Lawrence said.
“They haven’t been able to pencil in acquisitions,” he said.
The latest figures from the fourth quarter show that investors owned 26% of all homes in Dallas-Plano-Irving and 30% in Fort Worth-Arlington, compared to 25% nationally.
To determine which homes were investor-owned, John Burns used an analysis of public records from the computer firm CoreLogic to determine which homes had different zip codes on their tax returns than the properties themselves. The actual amount of investor activity is likely higher, because some owners do not change their property tax address.
Results may vary between different methods of tracking investor activity. A separate report from Redfin tracked investors by analyzing company names and other information from deed records and found that investors bought 17.8% of U.S. homes in the fourth quarter. That report did not include states that do not report home prices, such as Texas.
Jonathan Rosen, a Compass realtor who focuses on Dallas neighborhoods like Highland Park, University Park and Preston Hollow, said he gets two or three calls a day from investors looking for real estate.
“Even with the banks tightening, there’s still a lot of cash out there,” Rosen said.
Many investors attract sellers through promises of quick, easy transactions and cash offers. Frank Obringer, who manages Coldwell Banker Realty’s Plano office, claims that sellers are missing out on getting the most bang for their buck by not working with agents who want to market their home to as many people as possible and help them make the necessary the upgrades to their home. before listing.
“Yes, it’s a convenience, but this convenience comes at a great cost,” said Frank Obringer, who manages Coldwell Banker Realty’s Plano office. “They’re giving away their equity in their home.”
Investors can also put competing buyers at a disadvantage and push them out of the market, Obringer said.