Investor Home Purchases in U.S. Drops to 22-Month Low

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The number of homes sold in the U.S. increased slightly in January, while the share of institutional investors fell to the lowest level since March 2012, according to the latest report from RealtyTrac. 

U.S. homes -- single-family, condominiums, townhomes -- sold at an estimated annual pace of 5,126,001 in January, increasing less than 1 percent from the previous month and an 8 percent jump from a year ago.   

Bucking the national trend, annualized home sales volume fell from a year ago in seven states and 17 of the country's 50 largest metro areas, including San Jose (down 22 percent), Los Angeles (down 16 percent), Phoenix (down 14 percent), Las Vegas (down 11 percent), and Orlando (down 7 percent).

In January, the share of institutional investors -- purchasing at least 10 properties in a year -- totaled 5.2 percent of all sales, down from 7.9 percent in December and 8.2 percent a year ago. After 20 consecutive months of increases, the January share of institutional investor purchases represented a 22-month low. 

According to the National Association of Realtors, existing-home sales in January fell to an 18-month low. Severe weather across the nation has been cited a reason for the deceleration in the housing market recovery but it may not be the cause for the decrease in institutional investors, RealtyTrac states. 

"Many have anticipated that the large institutional investors backed by private equity would start winding down their purchases of homes to rent, and the January sales numbers provide early evidence this is happening," Daren Blomquist, RealtyTrac vice president, said in the report. "It's unlikely that this pullback in purchasing is weather-related given that there were increases in the institutional investor share of purchases in colder-weather markets such as Denver and Cincinnati, even while many warmer-weather markets in Florida and Arizona saw substantial decreases in the share of institutional investors from a year ago."

The metro areas with large declines in institutional investor share from a year ago included Cape Coral-Fort Myers Fla. (down 70 percent), Memphis, Tenn., (down 64 percent), Tucson, Ariz., (down 59 percent), Tampa, Fla., (down 48 percent), and Jacksonville, Fla., (down 21 percent).

On the other hand, 23 of the 101 metro areas posted yearly increases in institutional investor share, including Atlanta (up 9 percent), Austin, Texas, (up 162 percent), Denver (up 21 percent), Cincinnati (up 83 percent), Dallas (up 30 percent), and Raleigh, N.C. (up 15 percent).

In January, short sales and foreclosure-related sales accounted for a combined 17.5 percent of all home sales, increasing from 14.9 percent in December, but down from 18.7 percent a year ago. 

The national median sales price -- including both distressed and non-distressed sales -- was $165,957 in January, dropping 3 percent from December, marking the largest monthly decline since February 2013. However, the median sales price was up 1 percent from January 2013. 

More from the report: 

• Metro areas with the highest share of institutional investor purchases included Jacksonville, Fla. (25.5 percent), Atlanta (25.1 percent), Austin, Texas (18.0 percent), Charlotte, N.C. (14.9 percent), and Greenville, S.C. (14.0 percent).

• The share of residential properties sold at the public foreclosure auction in January jumped to 1.5 percent of all residential sales, up from 1.0 percent in December and up from 1.0 percent in January 2013.

• Metro areas with the highest percentage of foreclosure auction sales included Atlanta (6.2 percent), Salt Lake City (6.0 percent), Charlotte, N.C. (4.6 percent), Las Vegas (4.1 percent), and Miami (3.8 percent).

• All-cash sales accounted for 44.4 percent of all U.S. residential sales in January, the seventh consecutive month where all-cash sales have been above the 35 percent level.

• Metro areas with the  highest percentage of cash sales included Miami (68.2 percent), Jacksonville, Fla., (66.2 percent), Memphis, Tenn., (64.4 percent), Tampa, Fla. (61.5 percent), and Las Vegas (56.5 percent).

• Short sales accounted for 5.9 percent of all U.S. residential sales in January, up from 5.4 percent in December but down from 7.4 percent a year ago.

• States with the highest percentage of short sales were Florida (14.9 percent), Nevada (13.4 percent), Illinois (9.5 percent), New Jersey (8.7 percent) and Maryland (8.0 percent).

• Sales of bank-owned residential properties accounted for 10.2 percent of all U.S. residential sales in January, up from 8.5 percent in December but down from 10.4 percent a year ago.

• States with the highest percentage of bank-owned sales were Nevada (23.2 percent), Ohio (21.2 percent), Michigan (19.9 percent), Arizona (16.6 percent), and Illinois (15.8 percent).

• Some of the nation's fastest appreciating markets on a year-over-year basis posted month-over-month decreases in January, including San Francisco (down 2 percent monthly but still up 27 percent annually); Sacramento, Calif. (down 2 percent monthly but still up 25 percent annually); Memphis (down 1 percent monthly but still up 23 percent annually); Cincinnati (down 2 percent monthly but still up 20 percent annually); Phoenix (down 1 percent monthly but still up 19 percent annually); and San Jose (down 2 percent monthly but still up 19 percent annually).