If you put a house on the market today, chances are a company is trying to buy it rather than someone looking 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.
Those buyers accounted for 50,526 of the 169,606 new and resale home purchases in the metro area, the firm found.
Investors held a larger share in the Fort Worth-Arlington metropolitan division than in the Dallas area, accounting for about 33% of all home purchases last year. In the Dallas-Plano-Irving metro division, investors accounted for about 28% of sales.
They range from landlords and mom-and-pop pinball machines to large corporations such as Dallas-based Invitation Homes and Las Vegas-based AMH (formerly American Homes 4 Rent) that have taken tens of thousands of rental homes 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 which is also diversifying into the types of jobs that appeal,” said Dallas vice president Bryan Lawrence. with John Burns. Real estate advice.
John Burns’ research also includes iBuyers such as Opendoor that offer to buy homes directly from sellers and resell them after making minor repairs. According to the housing analyst, their share of the US and local housing markets has declined over the past two quarters. Two of the best-known players in the space, Zillow Group and Redfin, shut down their iBuying businesses in 2021 and 2022.
Real estate investment activity increased in North Texas during the pandemic as home values soared, peaking in the first quarter of 2022. Since the peak, many investors have paused as rising rates interest and property taxes soared as house prices rose further.
Companies looking to rent homes are struggling to put cash to work as experts expect rent growth to slow, Lawrence said.
“They weren’t able to make acquisitions in pencil,” he says.
The most recent fourth quarter figures show investors owned 26% of all homes in Dallas-Plano-Irving and 30% in Fort Worth-Arlington, compared to 25% nationally.
To determine which houses were owned by investors, John Burns used an analysis of public records from data firm CoreLogic to determine which houses had different zip codes on tax returns than the properties themselves. The actual amount of investor activity is likely higher as some owners do not change the tax address of the property.
Results may vary based on different methods of tracking investor activity. A separate Redfin report tracked investors by analyzing company names and other information from deed records and found that investors bought 17.8% of US homes in the fourth quarter. This report did not include states that do not disclose home prices, such as Texas.
Jonathan Rosen, a real estate agent for Compass who focuses on Dallas neighborhoods such as Highland Park, University Park and Preston Hollow, said he gets two or three calls a day for investors looking for property.
“Even with the banks tightening, there’s still a lot of money left,” Rosen said.
Many investors lure sellers with promises of quick and easy trades and cash offers. Frank Obringer, who manages the Plano office of Coldwell Banker Realty, says these sellers are missing out on getting the most for their money by not working with agents who would sell their homes to as many people as possible and help them bring in necessary improvements to their home. before registration.
“Yes, there is convenience, but that convenience comes at a huge cost,” said Frank Obringer, who manages Coldwell Banker Realty’s Plano office. “They give away the equity in their home.”
Investors can also disadvantage competing buyers and drive them out of the market, Obringer said.