The housing market is competitive. In Texas, buyers aren’t only going up against other buyers hoping to move in, but investors looking to make out with a profit.
According to a National Association of Realtors report (via WFAA), corporations, companies or limited liability companies (LLC) bought 28% of homes sold in Texas last year.
This is the highest rate in the US and more than double the national average.
In North Texas, the number is even higher. For example, as KRLD notes, investors bought 34% of homes in Collin County, 39% of homes in Denton County, 43% of homes in Dallas County and 52% of homes in Tarrant County. That last figure, the Fort Worth Star-Telegram points out, means that one in two houses sold last year in the county went to a company or a corporation.
“The very things that make Texas very attractive to people moving here and wanting to be homeowners themselves are the exact same factors that make it attractive as an institutional investor,” Chris Kelly, the president and CEO of realtor company Ebby Halliday, told WFAA. “You are one of many, probably, who are going to be competing for that same property.”
According to Kelly, investors are not entering bidding wars or paying higher prices. Rather, they stick to a narrow price range but close the deal in cash. They don’t even necessarily inspect the homes. “It’s the speed at which it can be done, and, ‘Oh, I don’t have to worry about all these other hassles,'” Kelly added. This does impact the supply of homes available to purchase, driving prices higher.
Not all these investment homes are being flipped. Some are turned into rentals.
But for those hoping to buy, Kelly is still optimistic. “There is still plenty of opportunity, especially in our marketplace.”
In case you missed it, check out Local Profile‘s tips for finding the perfect house rental.