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IRVINE, CA—Sales to institutional investors—entities that purchase at least 10 properties in a calendar year—accounted for 4.3% of all sales of single-family homes and condos in the third quarter of the year, representing the lowest level since the fourth quarter of 2010, according to a report from RealtyTrac. The figure is down from 5% in the previous quarter and down from 5.3% a year ago, the firm reports.

According to Daren Blomquist, VP of RealtyTrac, “Institutional investors are still actively purchasing single-family rentals, but continue t gravitate toward markets where lower-end inventory is still available. Meanwhile, there has been a recent surge in cash buyers in some markets, often coinciding with either a rebound in distressed sales attracting bargain-hunting cash buyers or a booming job market engendering a competitive bidding environment where cash is king.”

Overall, though, cash sales decreased on a national basis during the quarter. RealtyTrac reports that all-cash sales accounted for 33.9% of all sales of single-family homes and condos nationwide in the third quarter, down from 36.9% in the second quarter and unchanged from a year ago.

“Cash sales continue to be an important piece of the real estate puzzle right now, representing one in every three home sales nationwide in the third quarter of 2014 and helping to drive up US median home prices 38% over the last two-and-a-half years,” says Blomquist. “As institutional investors and other cash buyers slow down their purchasing in many markets across the country, more traditional buyers—including first-time homebuyers and move-up buyers—will need to fill in the missing puzzle pieces increasingly to maintain the momentum of the housing recovery.”

Blomquist tells GlobeSt.com, “We do expect the cash share of sales to continue to decrease, but not too much before it plateaus at a historically normal level. The 33.9% of cash sales in the third quarter was actually not too far above the historic norm of 33.4 percent going back to 2001. I think it may surprise many that the historic norm is one in every three sales of residential properties is a cash sale, but cash has always had a significant role in the real estate market and will continue to do so.”

Cash sales were on a downward trend last quarter as well. As GlobeSt.com reported in August, cash purchases represented 38% of home sales nationwide in the second quarter, down from 42% in Q1, according to a report from RealtyTrac. In addition, cash sales skewed higher on both ends of the home-price spectrum in Q2, the firm said.

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