Homebuyers looking for a new place to rest at night in the Metro Detroit area are fighting over one of the limited number of homes for sale.
But added to the mix: investors, who are also vying to buy houses of the same historically low pot.
Their opposite goal: a place for others to rest at night.
In fact, Metro Detroit saw the third highest increase in the country, by percentage points, in the number of homes bought by investors year over year, according to data compiled by online real estate company Redfin based. in Seattle.
This adds more fish to the pond competition, in some cases for the same worm.
And these new fish can have a much bigger mouth.
“For buyers, they not only bring more competition, they are cash buyers who can close quickly, making it even more difficult for buyers to obtain a mortgage,” said Frank Tarala Jr., broker and owner of SIRE Realty Services in Rochester and past president. of the Greater Metropolitan Association of Realtors, an industry association based in Southfield, as well as Realcomp II Ltd., based in Farmington Hills.
“For sellers, this can mean a quick and easy sale allowing a seller to move forward with their future,” Tarala said.
According to Redfin, there were 1,018 homes bought by investors in the Metro Detroit area in the first quarter (16.2% of homes sold in total), up from 761 in the first quarter of last year, marking an increase of 33 , 8% year on year.
This represents the second largest jump in the country, behind San Jose, Calif. (44% year-over-year increase) and above Chicago (27.2% year-over-year increase. the other), Riverside, Calif. (24.5% year-over-year increase). from the previous year), Oakland, California (24.4% increase from the previous year) and Seattle (23.3% increase from the previous year).
Investors have spent a record $ 77 billion on single-family homes in the past six months nationwide, a record high, according to Redfin. Locally, they deposited around $ 104.7 million, or $ 71,250 on average, in Detroit metro homes in the last quarter, up from $ 77.4 million in the fourth quarter of 2020.
The precise type of investors hiding in the waters is a bit unknown, said Sheharyar Bokhari, senior economist at Redfin.
Whether it’s big institutional investors like Blackrock Inc. and JP Morgan Asset Management that the Wall Street Journal detailed in April as having a big appetite for single-family homes, or small family-run operators with a few homes to their name. – or investors somewhere in between – they’re all in the game here.
“They’re all mixed in with it,” Bokhari said.
He said the data was compiled by researching business entities such as limited liability companies that have been registered as home buyers.
Still, the presence of the investor class in the Detroit metro area is not new.
In fact, at least one in 10 homes in the region have been sold to an investor every quarter for four consecutive years, according to Redfin’s analysis.
Its increased activity around town is just more pronounced now with fewer homes for sale.