Across the U.S.’s red-hot competitive housing market, real estate supply shortages are being exacerbated in a majority of the largest cities by property investors, according to a report released Thursday by realtor.com.
Investors are contributing to inventory shortages in 31 of the top 50 largest metropolitan areas, the online property portal said in their release, which analyzed U.S. deed records.
The areas where investors—a designation that included individual investors, REITs and limited liability companies—are taking away inventory are those where they’re buying more homes than they sell.
Phoenix was the city where investors contributed most to supply shortages, taking a net total of 429 homes off the market in April. Charlotte, North Carolina, ranked as the second most impacted metro area, where investors left a dent of 287 homes, the report said.
Miami; Tampa, Florida; and Chicago rounded out the top five.
“Today’s buyers are facing a tough market and data shows they aren’t just competing with each other. With deep pockets and more flexibility, investors can be daunting competition for the typical homebuyer,” Danielle Hale, chief economist at realtor.com, said in the report. “Right now, data shows investors are buying more homes than they are selling, and while they get a lot of attention in today’s market, it’s worth remembering that they can also contribute to inventory levels.”
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That’s exactly what’s happening in 19 of the largest 50 markets, where investors are selling more homes than they’re buying, the report found.
Most significantly, investors are contributing supply in Atlanta, where they added a net total of 399 homes to the housing market in April. Dallas ranked second, where investors have put 239 homes into the inventory pool.
Baltimore, Los Angeles and San Francisco followed.
Compared to the markets where investors hindered inventory, the cities where investors contributed supply are larger, with less homes for sales and higher prices, the report said.
“High home prices, slower rent growth, and uncertainty over the future of work in these markets are likely causing investors to reevaluate their property portfolios in these areas,” Ms. Hale said. “And with homes still selling quickly, even in these metros, an investor deciding to sell can look forward to being able to reposition their dollars elsewhere in a very short period of time.”
(Mansion Global is owned by Dow Jones. Both Dow Jones and realtor.com are owned by News Corp.)