SAN FRANCISCO – Nov. 29, 2018 – About one in 10 homes sold so far in 2018 by the nation’s two leading iBuyers – Opendoor and Offerpad – were purchased by institutional investor entities buying at least 10 homes, according to a new ATTOM Data Solutions analysis.
ATTOM’s analysis found that institutional investors purchased a total of 743 homes sold by the two iBuyers so far in 2018, or 9.6 percent of all their sales combined. It’s an increase from 293 institutional investor purchases (6.6 percent of iBuyer sales) in 2017 and 65 institutional investor purchases (3.9 percent of the iBuyer sales) in 2016.
“There are a lot of buyers, both big and small, looking to grow their SFR portfolios and inventory is very tight,” says Kevin Ortner, CEO with Renters Warehouse, a company that manages more than 22,000 SFR properties in 42 states. “This is leading to creative ways to find new product – from build-to-rent programs, off-market inventory programs and iBuyer initiatives. There are several firms positioning themselves to be able to help bring supply to meet the demands of investors, and I expect that will continue to grow. I’m also seeing investment in technology and data across the space allowing greater scale, efficiencies and insights.”
The top three institutional buying entities – Cerberus SFR Holdings LP, CSH Property One LLC, And TAH Holding LP – all appear to be related to companies purchasing single family homes as rentals.
Institutional investors may be turning to iBuyers as a source of inventory since other sources, such as foreclosures, have largely dried up in recent years. Overall institutional investor purchases are slowing as a percentage of all sales. They represented just 2.3 percent of all U.S. home sales so far in 2018, down from 2.9 percent in 2017 and down from a peak of 7.4 percent in 2012, according to the ATTOM analysis.
“A properly priced rental home today, there is almost limitless demand for it,” says Gary Beasley, CEO and co-founder with Roofstock, an online marketplace for SFR properties. “We have to get creative about how to attract this inventory – and if it isn’t available to create it.”
© 2018 Florida Realtors®
Reprinted with permission. Florida Realtors®. All rights reserved.