Charlotte most active market for institutional investors

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Homes bought by institutional investors in April in the Charlotte area reached a record high of 737, according to RealtyTrac, whose records begin in January 2011.

The percentage of homes purchased in the region by institutional investors in April was higher than in any other metro area in the U.S., according to RealtyTrac, a California-based real estate information and analytics provider.

Institutional investors were responsible for 27.2 percent of all Charlotte-area home sales in April, which was significantly higher than the 13.4 percent of homes institutional investors purchased in April last year. The rate of institutional investor purchases in March was 10.8 percent.

Institutional investors are defined as entities that purchase 10 or more homes in a calendar year.

Nancy Braun, owner of Charlotte-based Showcase Realty, said institutional investors are taking advantage of the area’s high demand for rental housing.

“You definitely have some institutional investors that are feeling very strong and positive about our economy and the rental opportunities that are still out there,” she said.

Daren Blomquist, vice president at RealtyTrac, said during an interview that 390 of the 737 homes purchased by institutional investors were bought by one company, an indirect subsidiary of Silver Bay Realty Trust Corp. He also said an increasing number of bank repossessions the last couple of months could have contributed to the high number of homes purchased by institutional investors in April.   

In April 2014, institutional investors purchased 279 homes.

Behind Charlotte was Atlanta, where 17.5 percent of all homes were purchased by institutional investors in April. Memphis, Tennessee, had the third-highest rate of institutional investor purchases, at 11.8 percent.

The percentage of homes purchased with cash in Charlotte also jumped up in April to 42.7 percent, compared with 35.4 percent a year ago.

Ten metro areas in the U.S. had higher cash sales rates than Charlotte in April, including the Sarasota-Bradenton-Venice area in Florida, which had the highest rate of cash sales at 59.4 percent.

Nationally, 28.7 percent of all homes were purchased with cash in April, down from 29.9 percent in March and 32.8 percent a year ago.

RealtyTrac also reported that the median sales price of homes, including distressed properties, in the Charlotte area fell 3 percent to $145,000 in April compared with $150,000 a year ago. Compared with March, the median sales price in April dropped 2 percent.

The median sales price of distressed homes, on the other hand, rose 16 percent to $102,000 in April from $88,000 a year ago, but fell slightly from $102,368 in March.

Among U.S. counties with a population of more than 100,000 and at least 100 home sales, Mecklenburg County was one of 85 in which homes sold on average for at least 101 percent of their estimated market value. In both Alameda and San Francisco counties in California, homes sold on average for 108 percent of their market value, the highest in the country.

Nationally, the median home sales price in April was $171,700, up 2 percent from a year ago and down 1 percent compared with March. The median home price in April appreciated year-over-year at its lowest rate since April 2012.

The San Jose-Sunnyvale-Santa Clara area in California had the highest median sales price in the country in April at $750,000.