Analyzing the “Who” Behind Recent Real Estate Boom

Realty Trac - 22 February 2017

 ATTOM Data Solutions, curator of the nation’s largest fused property database, and Clear Capital (www.clearcapital.com),the leading provider of commercial and residential real estate valuations, data and analytics, quality assurance services, and technology solutions, today released a joint white paper titled “Landlord Land” that analyzes the “who” behind the recent real estate boom that has seen home prices reach near all-time highs nationwide even while the national homeownership rate remains near its 50-year low.

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“Though prices in several markets are nearing pre-bust levels, the composition of both the supply and demand of today’s real estate market is starkly different than a decade ago,” said Alex Villacorta, Ph.D., vice president of research and analytics at Clear Capital. “As such, it’s imperative for all market participants to understand the nuances of the New Normal Real Estate Market.”

Leveraging proprietary data from ATTOM Data Solutions and Clear Capital Analytics, along with insights from national and local market experts, the white paper follows the arc of the recent housing boom starting with the rise of institutional investors as early as 2009 in some markets. It then traces the eventual pullback of institutional investor acquisitions followed by a brief uptick in first-time homebuyers and a more sustained surge in smaller rental investors that in turn is feeding a renewed home flipping frenzy.

“A housing recovery that is highly dependent on real estate investors is a bit of a double-edged sword,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. “Rapidly rising home values have been good for homeowner equity, but also have caused an affordability crunch for the first-time homebuyers the housing market typically relies on for sustained, long-term growth.”

 

 

Key data, charts and interactive heat maps included in the report:

  • Historical median price and price per square foot nationally, in Dallas, Nashville and Seattle
  • Historical institutional investor share of sales nationally, in Dallas, Nashville and Seattle
  • Investor-owned heat map showing share of homes owned by investors at the zip code level nationwide
  • Percentage of residential property landlords broken down by number of properties owned nationwide, in Dallas, Nashville and Seattle
  • Historical share of FHA buyers and non-owner occupant (investor) buyers during the recent housing recovery nationwide, in Dallas, Nashville and Seattle
  • Home-flipping heat map showing share of 2016 home sales that were flips at the zip code level nationwide
  • Share of home flips being sold to cash buyers in Nashville and Seattle
  • Historical home affordability index nationwide and for Dallas, Nashville and Seattle

National and local market expert insights from the report:

“There are a few hard money lenders here, and they bring people who are not fulltime investors and people who are end users … to the (foreclosure) auction and are outbidding anyone who is a traditional investor,” said Chris Richter, CEO at Audantic Real Estate Analytics, a Seattle-based company providing predictive analytics for real estate investors.

“Early on it was the mid-size investors all the way up to the large institutions (that) had the most urgent need for capital,” said Ryan McBride, COO at Colony American Finance, an Irvine, California-based company providing financing for real estate investors. “We see a lot more opportunities from the smaller, midsized operators, and so that is where we are focusing our efforts: the broad base of the pyramid.”

“A lot of demand is people in the Bay Area and New York City looking to buy in the Southeast,” said Gary Beasley, CEO and founder at Roofstock, an online marketplace for single family rentals. “We have one Google engineer who just bought his sixth house. He said ‘this is fantastic, real estate is so expensive here and I don’t want to be tied just to Bay Area real estate.'”

“I’ve noticed more millennials or their parents calling me and saying … ‘my son wants to buy a house and we’re willing to help with the down payment. He’s been living with several other friends in an apartment … and they want to continue to live together,'” said Edward Krigsman, Managing Broker with Windermere Real Estate in Seattle.

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