Institutional investors purchased fewer residential properties in June than a year ago, but these types of buyers will still be able to acquire single-family homes, condominiums and co-ops in certain markets.
According to RealtyTrac’s first-ever residential sales report, U.S. residential property sales reached an estimated annualized pace of 5.3 million in June 2013, a 2% increase from May and up 8% from last year.
But during the month, nonlending entities who purchased at least 10 homes in the last 12 months—also known as institutional investors—accounted for 9% of all residential sales in June, a 10% drop from the prior year. The most prominent states where investors bought the highest percentage of residential assets were Georgia, Nevada, Arizona, Oklahoma, North Carolina and Florida.
Additionally, all-cash purchases of all residential sales in June dropped month-over-month and year-over-year from 31% to 30%.
“The U.S. housing market is slowly but surely moving toward a more normalized and sustainable pattern after a flurry of institutional and cash buyers flocked to residential real estate last year, pushing up prices and picking clean the best inventory available in many areas,” said Daren Blomquist, vice president at RealtyTrac.
“Rising home values should continue to unlock more nondistressed inventory while also pricing institutional investors out of more markets, which,
The report also shows that bank-owned sales and short sales, combined, represented 23% of all residential sales, with REO comprising 9% of this total and short sales 14%. June REO sales were the same from last year, while short sales increased from 8% a year ago, the Irvine, Calif.-based analytic firm reported.
RealtyTrac said Nevada (30%), Florida (29%), Maryland (21%), Tennessee (19%) and Arizona (19%) had the highest proportion of short sale activity relative to total sales.
Furthermore, metro areas where REO sales represented the largest percentage of total sales included Detroit (24%), Modesto, Calif. (24%), Stockton, Calif. (24%), Las Vegas (22%) and Akron, Ohio (21%).
The median price of a distressed sale, either in foreclosure or REO, was $120,000, 34% below the median price of a nondistressed asset. Meanwhile, the national median sales price for the month was $168,000, a rise on a monthly and yearly basis by 3% and 5%, respectively.
“Home values have increased so much that fewer people are upside-down on their homes,” said Sheldon Detrick, CEO of Oklahoma City-based Prudential Detrick/Alliance Realty. “Last month’s increase in short sales is the tail end as short sales are becoming rarer. I guarantee there will not be any new short sales in the future.”
