U.S. residential real estate investment has nearly returned to pre-pandemic levels, according to a report Thursday from Redfin.
Investors, defined as institutions or businesses that purchase residential real estate, bought close to 68,000 properties in the second quarter, a 15.1% quarter-over-quarter increase, the report found. That’s the highest quarterly figure recorded since 2000, when the property portal began tracking the data.
The number of sales more than doubled compared to the second quarter of 2020, when the Covid-19 pandemic severely curtailed sales, the data showed.
Increased investor activity resulted in $48.5 billion worth of sales in the second quarter of 2021, according to the report. The total, an all-time high, rose from $38.9 billion the previous quarter and $20.9 billion in the same time period in 2020.
Investor interest has risen in spite of rising home prices, according to the report. They spent an average of $439,600 on properties, 23.7% higher than a year earlier.
“Investors see soaring home prices as an opportunity,” Sheharyar Bokhari, senior economist at Redfin, said in the report. “With housing values consistently on the rise, solid returns are pretty much guaranteed—especially when you’re an investor who has access to extremely cheap debt.”
Still, investor interest has not quite returned to pre-pandemic levels. About one in six homes, or 15.9%, were purchased by investors in the second quarter of 2021, compared to the 16.1% market share they had in the first quarter of 2020, Redfin found.
In Phoenix, investments made up 24.5% of purchases in the second quarter of 2021, the highest of the 41 metro areas included in the report. Miami was second, with investors buying 24.2% of properties, followed by Atlanta, where 23.6% of residences were bought by an institution or business.
Article Source: Mansion Global