"On a median-priced home of $405,000, that equates to an extra $7,300 to $17,415. These overbids often include all-cash transactions, waived contingencies and faster closings. There are several reasons an investor might pay more than market value, Malone wrote. It can be a tactic to quickly close on a home, or it could be a speculative bet that the seller has underpriced a property. It could also simply be a lack of local knowledge."
"Smaller investors with fewer than 10 properties typically pay about 1.8% above market value, while large investors owning more than 1,000 homes pay 4.2% more on average. Malone said overpayments can be offset by long-term price appreciation or higher rents, particularly for smaller landlords. Rents have risen 2.3% year over year, according to Cotality, as more potential buyers remain renters. But rent growth has slowed and is below pre-pandemic averages."
Investors frequently pay premiums on homes, adding roughly $7,300 to $17,415 on a $405,000 median-priced house through tactics like all-cash offers, waived contingencies and faster closings. Investor purchasing more than doubled since mid-2020 and reached about one-third of U.S. home purchases by early 2025, with activity expected to remain steady through 2025. Smaller investors (<10 properties) pay about 1.8% over market, while very large investors (>1,000 homes) pay about 4.2% more. Overpayments can be offset by long-term price appreciation or higher rents, though rent growth has slowed, narrowing investor margins and placing particular pressure on first-time buyers.
Read at www.housingwire.com
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