Investors Drive Up Home Prices
Real estate investors are outbidding first-time buyers, paying up to 4.3% over market value, making it challenging for them to compete.
Coupled with high mortgage rates and record-high home prices, real estate investors are making it harder for first-time buyers, according to data from Cotality, a real estate analytics firm.
- Investors pay premiums ranging from 1.8% to 4.2% over market value, depending on portfolio size.
- On a median-priced home of $405,000, this equates to an extra $7,300 to $17,415.
“There are several reasons an investor might pay more than market value,”
These overbids often include all-cash transactions, waived contingencies, and faster closings, says Thom Malone, Cotality’s principal economist.
Author's summary: Investors outbid first-time buyers, driving up home prices.