Two homes just minutes from the University of Houston, priced at $265,000 each, seem perfect for the first-time homebuyer. Well, too bad. These listings, which have racked up thousands of views online, read, “Investors only.”
As home prices, then rents, soared in 2021, investors snatched up Houston area homes. About 40 percent of existing homes sold in Harris County last year went to investors, one of the highest percentages in the country, according to the Houston Chronicle.
In a study conducted by the National Association of Realtors, which defined investors as any corporation, company or limited liability company, the association found that Texas led the country for the highest share of homes purchased by investors, with other Southern states, such as Georgia, Oklahoma and Alabama, not far behind. Elsewhere in Texas, like the Fort Worth area, 52 percent of homes in 2021 were purchased by investors.
“Housing supply is very tight,” said Gay Cororaton, NAR’s senior economist. “That competition — especially because they’re paying all cash — that really makes it more difficult for first-time buyers to get into homeownership.”
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One survey of members of the National Association of Realtors estimated that 42 percent of company-bought homes are turned into rentals. Despite the number of existing homes being converted to rentals, it won’t necessarily be any easier to find a single-family rental unit.
“These are attractive markets,” Cororaton said, noting that population growth mixed with record rent increases for single-family homes —which are outpacing inflation— drove investor interest in Texas homes skyward.
Houston single-family rents were 9.9 percent more this March than the same time last year. Demand in South Texas for single-family rentals has attracted developers as well as investors. There are 1,620 units in build-for-rent communities within Houston city limits, making it the second-highest municipality nationally.
[Houston Chronicle] — Maddy Sperling