If you put a home on the market today, chances are a company will try to buy it rather than someone looking to move in.
Investors purchased about 30% of all single-family homes in the Dallas-Fort Worth area last year, according to research from national housing analyst John Burns Real Estate Consulting.
These buyers made up 50,526 of the 169,606 purchases of new and resale homes in the area, the firm found.
Investors had a larger share in the Fort Worth-Arlington area division than in the Dallas area, making up about 33% of all home purchases last year. In the Dallas-Plano-Irving area division, investors represented about 28% of sales.
They range from mom-and-pop landlords and flippers to large companies such as Dallas-based Invitation Homes and Las Vegas-based AMH (formerly American Homes 4 Rent) that have snapped up tens of thousands of rental homes across the country since the 2008 recession.
“Investors want to own real estate in markets such as Dallas, which performed well during the global financial crisis, and which is also becoming more diversified in the types of jobs that attracts,” said Bryan Lawrence, a vice president with John Burns Real Estate Consulting in Dallas.
John Burns’ research also includes iBuyers such as Opendoor who offer to purchase homes directly from sellers and resell them after making light repairs. Their share of the U.S. and local housing markets has declined over the last couple of quarters, according to the housing analyst. Two of the best-known players in the space, Zillow Group and Redfin, shuttered their iBuying businesses in 2021 and 2022.
Home investment activity grew in North Texas during the COVID-19 pandemic as home values soared, peaking in the first quarter of 2022. Since the peak, many investors have paused as interest rates and property taxes soared while home prices still increased.
Companies looking to rent out homes have struggled to put money to work as experts expect rent growth will slow, Lawrence said.
“They haven’t been able to make acquisitions pencil,” he said.
The most recent numbers from the fourth quarter show investors owned 26% of all homes in the Dallas-Plano-Irving area and 30% in the Fort Worth-Arlington area, versus 25% nationally.
To determine which homes were investor owned, John Burns used an analysis of public records from data firm CoreLogic to determine which homes had different ZIP codes on tax statements than the properties themselves. The actual amount of investor activity is likely higher, because some owners do not change the property tax address.
Results can vary between different methods of tracking investor activity. A separate report from Redfin tracked investors by analyzing company names and other information from deed records and found investors bought 17.8% of U.S. homes in the fourth quarter. That report did 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 such as Highland Park, University Park and Preston Hollow, said he gets two or three calls a day from investors looking for property.
“Even with banks tightening, there’s still a lot of cash out there,” Rosen said.
Many investors attract sellers through promises of fast, easy transactions and cash offers. Frank Obringer, who manages Coldwell Banker Realty’s Plano office, argues those sellers are missing out on getting the most for their money by not working with agents who would market their home to as many people as possible and help them make the necessary upgrades to their home ahead of listing.
“Yes, there is a convenience, but that convenience comes at a huge cost,” Obringer said. “They’re giving away their equity in their home.”
Investors can also put competing buyers at a disadvantage and push them out of the market, Obringer said.
