Squeezing out buyers or driving growth? Local real estate execs talk investor activity

  • Charlotte Living Realty
  • 04/22/22

This article was first shared by the Charlotte Business Journal. 

 

The April 1-7 edition of the Charlotte Business Journal lists the area’s largest residential real estate firms, ranked three ways. Firms are ranked by number of full-time licensed agents, plus closed sales volume and number of transactions by local offices in 2021. Allen Tate Realtors tops all three lists with 727 area agents, local sales of $3.4 billion in 2021 and 8,826 transactions last year by its Charlotte-area offices.

As part of CBJ’s residential real estate firms survey, we asked executives at agencies what role they saw investors playing in the local market.

In 2021, a quarter of the homes purchased in the Charlotte area were bought by investors, according to data from realty company Redfin. Meanwhile, in its February market data report, the Canopy Realtor Association reported that the Charlotte region had only 0.5-month supply of housing inventory. That extremely tight inventory has contributed to double-digit percentage gains in home prices. In February, the region saw a 22% annual growth in median home prices to $360,000, per Canopy.

 

Here's how top residential real estate executives in the area weighed in on the role of investors here.


Jeff Adams, Helen Adams Realty:

“In 2021, according to Zelman & Associates, the second home and investor market totaled 26% of total home closings across the U.S. which has fueled home sales. FNMAE is increasing the mortgage rate differential for investors and second home buyers; however, that may not slow down investor sales due to Wall Street funds' continued interest in the housing market.”

Scott Wurtzbacher, W Realty Group:

“Real estate investors are competing with owner occupants for the same houses in our market. In many of the multiple offer situations we've seen this year, investors have made up a large portion of offers. This increased competition is just adding to the upward pressure on prices.”


Natalie Costello, Costello Real Estate and Investments:

“Investors continue to play a big role in our market. They are vigorously searching for properties, submitting very competitive offers, and winning bidding wars over buyers who don't have the same funding. Prices are going to remain steady or continue to rise as long as investors are still in the market. I don't see investors stepping back anytime soon.”


Budge Huskey, Premier Sotheby's International Realty:

“Investor activity in the housing market is largely dependent on market and price range. Institutional investors continue to absorb more inventory and compete with non-cash buyers in the more moderate price ranges in key business markets, while individual investors will represent the related activity within secondary and tertiary markets. Within the higher-priced strata, investors have little impact since the basis of acquisition is generally to enter a rental pool.”


Daniel Cottingham, Cottingham Chalk:

“Real estate investors are playing a very big role in the market, and it's a problem. Institutional investors are scooping up homes that would otherwise be available to owner occupants, compounding the inventory problem.”


David Hoffman, David Hoffman Realty and Covenant First Mortgage/Beyond Title:

“I see real estate investors coming back into the market toward the end of the year. This will be for rentals, as some people move away from homeownership and toward renting.”

 

Yuriy Vaynshteyn, Engel & Volkers Charlotte:

“Role of real estate investors (small and large) has increased in recent years and will continue to increase as long as prices continue to climb and rent increase. I expect in 2022 for real estate investors to continue purchasing homes at high rate and squeeze out individuals in the marketplace.”


Sarah Szczodrowski, Dickens-Mitchener & Associates:

“Real estate investors have been successfully purchasing inventory in our market. The ibuyers especially have been paying over market value and driving home prices up. When the inventory goes back on the open market, it tends to be in need of repairs and updates and is overpriced, therefore sitting on the market a little longer than the average resale home.”


Pat Riley, Allen Tate Realtors:

“Why should anyone who has money to invest round out their portfolio with real estate? Lack of supply appreciation rates, low interest rates and higher rents are a hedge against the money being in the stock market.”


Eb Moore, Wilkinson ERA Real Estate:

“Real estate investors are integral to alleviating the inventory constraints within the rental market. As supply-chain delays subside and new construction picks up, the number of opportunities for investment will increase throughout the Charlotte metro area. Downtown Charlotte and the expansive North Tryon Vision Plan presents opportunities for renovation and resale or rental, while the greater Charlotte metropolitan statistical area shows home values with an annual appreciation of more than 24%. The city’s committed redevelopment along with a continued demand for housing by a young, growing workforce and influx of out-of-state residents presents ample opportunity for new or seasoned investors.”

 

Victor Ahdieh, Savvy & Co. Real Estate:

“It’s funny because I think most real estate professionals I know have kind of a love/hate relationship with investors. They are so great for our market and ensuring that Charlotte continues to grow by the leaps and bounds it has experienced over the course of the last few decades. The flip side to this story is that oftentimes this kind of growth means that certain neighborhoods start to lose some of what made them desirable and unique in the first place…I think investors are going to play an even larger role in the Charlotte real estate market in 2022. I’m hopeful that, with the right kind of partnerships, we will see an overall growth in our market that trends more toward making real estate investments work for our community over time."


Lisa Ratledge, Henderson Properties:

“There is a huge amount of investor presence in the Charlotte market that has played significantly into first-time homebuyers and owner occupants not being able to compete for a home. However, they (investors) are also a part of the numbers that are included in keeping values high for all current homeowners. Eventually the investors that have had success in the market will remain and the less productive investors will move on due to lack of inventory and competition.”

Abigail Jennings, Lake Norman Realty Inc.:

“Investors are actively seeking properties for their portfolios throughout our region due to the robust return on investment as property values continue to escalate. This is not a new trend, but one that has become more noticeable as inventory scarcity has amplified bidding wars for properties.”

 

Link to original article.