If you put a home on the market today, chances are a company will try to buy it, not someone looking to move in.
Investors bought about 30 percent of all single-family homes in the Dallas-Fort Worth area last year, according to a survey by national housing analyst John Burns Real Estate Consulting.
Those buyers made up 50,526 of the 169,606 purchases of new and resale homes in the metro area, the firm found.
Investors had a larger share in the Fort Worth-Arlington metro subdivision than in the Dallas area, accounting for about 33 percent of all home purchases last year. In the Dallas-Plano-Irving metro division, investors account for about 28% of sales.
They range from mom-and-pop landlords to large companies like Dallas-based Invitation Homes and Las Vegas-based AMH (formerly American Homes 4 Rent), which have snapped up tens of thousands of rental properties across the country since the 2008 recession.
“Investors want to own real estate in markets like Dallas, which performed well during the global financial crisis and which is also becoming more diverse in terms of the types of jobs it attracts,” said Brian Lawrence, vice president in Dallas with John Burns Real Estate Consulting.
John Burns’ study also includes iBuyers such as Opendoor, which offer to buy homes directly from sellers and resell them after making minor repairs. Their share of the U.S. and local housing market has declined over the past few quarters, according to the housing analyst. Two of the most prominent players in the space, Zillow Group and Redfin, have shuttered their iBuying businesses in 2021 and 2022.
Home investment activity surged in North Texas during the pandemic as home values rose, peaking in the first quarter of 2022. After the peak, many investors pulled back as interest rates and property taxes jumped, while the prices of housing continues to increase.
Companies looking to rent out housing are struggling to put money to work as experts expect rental growth to slow, Lawrence said.
“They haven’t been able to pencil in acquisitions,” he said.
The latest data from the fourth quarter shows that investors own 26 percent of all homes in Dallas-Plano-Irving and 30 percent in Fort Worth-Arlington, compared to 25 percent nationally.
To determine which homes are owned by investors, John Burns used public records analysis from data firm CoreLogic to determine which homes have different ZIP codes on their tax returns than the properties themselves. The actual amount of investor activity is likely higher because some owners do not change the property’s tax address.
Results may vary between different methods of tracking investor activity. A separate report from Redfin tracked investors by analyzing company names and other information from filings and found that investors bought 17.8 percent of U.S. homes in the fourth quarter. This report does not include states that do not disclose home prices, such as Texas.
Jonathan Rosen, a real estate agent for Compass who focuses on Dallas neighborhoods like Highland Park, University Park and Preston Hollow, said he gets two or three calls a day from investors looking for properties.
“Even with the tightening of the banks, there’s still a lot of cash,” Rosen said.
Many investors attract sellers with promises of quick and easy transactions and cash offers. Frank Obringer, who manages Coldwell Banker Realty’s Plano office, says these sellers are missing out on getting the most bang for their buck by not working with agents who would market their home to as many people as possible and help them make necessary upgrades to your home before listing.
“Yes, there is convenience, but that convenience comes at a huge price,” said Frank Obringer, who manages Coldwell Banker Realty’s Plano office. “They’re giving away their home equity.”
Investors can also put rival buyers at a disadvantage and force them out of the market, Obringer said.