Data from the National Association of Realtors shows a rise in investors and companies buying up residential homes in this resurging real estate market.
The report, released in May, shows Ohio 9th in the nation when it comes to “institutional buyers,” making up 16% of all home buyers in 2021.
It comes at a time when homes in Northeast Ohio are selling at prices never before seen in the market.
Data from MLS Now, a realty listing service in the area, shows the average home is selling for 10 thousand dollars more than it did during the peak of last year’s housing market, with the average single family home selling for more than $247,000 in May 2022.
Institutional buyers are typically corporations or companies that place all-cash offers on homes and turn them into rentals.
For Lydia Pope, the president of the National Association of Real Estate Brokers (known as NAREB), she’s experiencing more all-cash offers than ever before, including just last week.
“We had a strong offer,” she said. “Thirty percent down, a conventional loan and still we were beat out by a cash offer.”
Historically speaking, Ohio is one of the more affordable areas to buy a home. It's the same affordability that experts say makes Ohio one of the most popular states for investors looking to buy homes.
“You can get four or five properties for the price of one or two in a bigger area,” Pope added.
Pope is set to testify virtually on Wednesday before Congress and the U.S. House Committee on Financial Services, specifically addressing appraisal biases, down payment assistance, this hot housing market and the investors it’s drawing in.
“What happens is that it strips away the American dream of home ownership when a person has to rent versus buying a home,” she said. “You’re taking away that generational wealth.”
Pope told News 5 there is something that homeowners planning to sell can do to help in today’s real estate market.
“We can’t discriminate, we can’t steer, but we can say when you have a buyer that wants to buy a home, this is their dream,” she said. “Maybe it was your dream. How did sellers buy their house? Did they buy it in cash? Did they buy it by financing? Well, the same person wants to do the same thing.”