RealtyTrac released its January 2014 Residential & Foreclosure Sales Report, which shows that institutional investors — defined as entities purchasing at least 10 properties in a calendar year — accounted for 5.2 percent of all U.S. residential property sales in January, down from 7.9 percent in December and down from 8.2 percent in January 2013.
The January share of institutional investor purchases represented the lowest monthly level since March 2012 — a 22-month low.
Metro areas with big drops 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).
Counter to the national trend, 23 of the 101 metros analyzed in the report posted year-over-year gains 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).
The report also shows that short sales and foreclosure-related sales — including both sales to third party buyers at the public foreclosure auction and sales of bank-owned properties — accounted for a combined 17.5 percent of all U.S. residential sales in January 2014, up from 14.9 percent of all sales in December but down from 18.7 percent a year ago.
“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,” said Daren Blomquist. “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.”
Other high-level findings 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).
►U.S. residential properties, including single family homes, condominiums and townhomes, sold at an estimated annual pace of 5,126,001 in January, a less than one percent increase from the previous month and an eight percent increase from January 2013.
►Counter to the national trend, annualized sales volume declined from a year ago in seven states and 17 of the nation’s 50 largest metropolitan statistical areas, including San Jose (down 22 percent), Los Angeles (down 16 percent), Phoenix (down 14 percent), Las Vegas (down 11 percent), and Orlando (down seven percent).
►The national median sales price of U.S. residential properties — including both distressed and non-distressed sales — was $165,957 in January, down three percent from December but up one percent from January 2013. The three percent monthly decrease was the biggest monthly decrease since February 2013.
►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 two percent monthly but still up 27 percent annually); Sacramento, Calif. (down two percent monthly but still up 25 percent annually); Memphis (down one percent monthly but still up 23 percent annually); Cincinnati (down two percent monthly but still up 20 percent annually); Phoenix (down one percent monthly but still up 19 percent annually); and San Jose (down two percent monthly but still up 19 percent annually).