Institutional investors in residential properties made up 13.2% of all homebuyers in the United States in 2021 and 14% of the buyers in Colorado.
The National Association of Realtors conducted a study to determine what impact institutional buyers are having on the housing markets of the nation. Among its findings:
- While institutional investors made up a significant portion of the marketplace, they tended to pay less than the median prices in the states studied — 26% less.
- The share of institutional buyers is growing. It was 11.8% in 2020 and 13.2% in 2021.
- Colorado is not in the top five states where the practice is most common, but Colorado is among the states where the practice is growing most rapidly. The states with the most institutional activity were Texas, Georgia, Oklahoma, Alabama, and Mississippi.
- Institutional market share tended to be higher in counties with the tightest inventories of houses for sale.
The study also found that institutional buyers look for markets with fast-growing numbers of households, strong housing markets, and high incomes, among other factors.
Homeowners who sold to institutional buyers reported that they liked the cash offers that such buyers brought to the table, as well as speed of transactions and additional services that the buyers made available. Among those services were lease-back options so the seller could remain in the property.
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