IRVINE, CA—RealtyTrac has released its Q4 and Year-End 2014 U.S. Institutional Investor & Cash Sales Report, which shows that the share of home sales to institutional investors and all-cash buyers dropped to four-year lows in 2014 despite a quarterly increase in the fourth quarter.

A total of 105,278 single family homes were sold to institutional investors — entities that purchase at least 10 properties in a calendar year — in 2014, 4.2% of all sales and down 31% from the 153,450 institutional investor purchases in 2013 to a four-year low. Meanwhile overall sales of single family homes decreased 2% between 2013 and 2014.

In the past four years, institutional investors have purchased a total of 528,369 single family homes nationwide, led by Florida (78,155), California (52,802), Georgia (46,914), Arizona (35,979), and North Carolina (34,769).

Institutional investor purchases represented 3.7% of all single family home sales in the fourth quarter, up from 3.5% of sales in the third quarter but still below the 5.4% of all sales in the fourth quarter of 2013.

“While the overall percentage of purchases by institutional investors is nothing to write home about nationwide, the true impact of these investors can be seen more clearly at the hyperlocal level,” said Daren Blomquist, vice president at RealtyTrac. “There were 35 zip codes nationwide where at least 50 single family homes were purchased by institutional investors in the fourth quarter, with institutional investor purchases representing from 17% to 74% of all single family home sales in those zip codes.”

“With our limited land and growing population the institutional investors believe our region will outperform the U.S. market,” said Mike Pappas, CEO and president of the Keyes Company, covering the South Florida market, where institutional investors accounted for 21% of all single family purchases in zip code 33023 in Hollywood, FL in the fourth quarter.

All-cash purchases fall below 1 million for first time in three years in 2014. A total of 944,892 single family homes and condos were sold to all-cash buyers in 2014, down 13% from the 1,083,169 all-cash sales in 2013 and representing 30.9% of all sales during the year — a four-year low. Overall sales of single family homes and condos combined decreased 2% in 2014 compared to 2013.

“Cash buyers are still king in Seattle; made up primarily by investors at the low end and international home buyers at the high end,” said OB Jacobi, president of Windermere Real Estate, covering the Seattle market,” said OB Jacobi, president of Windermere Real Estate, covering the Seattle market, where the share of cash sales and institutional investor purchases increased from the third to fourth quarter. “In Seattle, we are beginning to see institutional investors sell off their properties because of the significant equity they've been able to build over the past few years. On the buying side, there has been a slight shift to smaller, local investors who historically need less upside in a deal to satisfy their requirements.”

Among metropolitan statistical areas with a population of at least 500,000, Miami had the highest share of all-cash sales in the fourth quarter of 2014 — 58.1% — followed by Sarasota-Bradenton-Venice, Florida (54.3%), Cape Coral-Fort Myers, FL (53.9%), Tampa (49%) and Memphis, TM (48.1%). Among these top five, only Memphis saw an increase in its all-cash sales share compared to a year ago.

Other markets with an increasing all-cash sales share compared to a year ago included Cincinnati, Oklahoma City, Greensboro, North Carolina, Buffalo, New York, and Philadelphia.

To see more, visit the RealtyTrac website.

Instant Insights /

Institutional and All-Cash Home Buying Waned in 2014

Related Stories

Recommended For You