This Is The City Where Investors Are Buying The Most Real Estate

By Douglas A. McIntyre Published Jun 18, 10:34AM EDT

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This Is The City Where Investors Are Buying The Most Real Estate — © Sean Pavone / iStock via Getty Images

The home market has changed radically over the last two years. Home prices rise by over 20% most months, year over year, according to the carefully followed S&P Case Shiller home price analysis. In some cities, the pace is closer to 30%.

Low mortgage rates have driven a large portion of the buying. Rates on 30-year fixed mortgages dropped below 3% last year. Those days are over. Interest rates on these loans are almost 6% today.

Ameria’s new mobility caused by the work-from-home movement, which was triggered by workplace shutdowns due to COVID-19, has allowed people to move from where they have to live to where they want to live.

These sharp price movements have brought investors into residential real estate. They buy homes not to live in them but to sell them at a profit. As home prices jumped recently, that has been profitable. Whether it is in a high-interest environment remains to be seen.

When local and first-time homebuyers hesitate, real estate investors rush in. And apparently, those investors are cashing in. Attom, a curator of land and property data, estimated in a first-quarter report that the typical return on investment was 47.2%, higher than the 37.5% return in the first quarter of 2021, and nearly 20 percentage points above the 29.4% return in the first quarter of 2019.

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Still, profit margins are tightening, down from 51.6% in the fourth quarter of 2021. Similarly, gross profits on home sales in the first quarter hit $103,000, down from $107,187 in the fourth quarter. Still, first quarter profit exceeded the profit of $75,001 recorded a year earlier. Attom attributed the decline in profit margin partly to a normally slow winter buying season. Yet it noted the dip was the first quarterly drop since the fourth quarter of 2019.

At the same time, the national median home price inched up a mere 1.7%, from $315,000 in the first quarter of 2021 to $320,500 in the first quarter of this year, Attom reports, continuing to attract investors, especially in some cities

To determine the city where investors are buying up the most real estate, 24/7 Wall St. reviewed data from real estate brokerage Redfin’s report Real Estate Investors Are Buying a Record Share of U.S. Homes. Metropolitan areas were ranked based on the percentage of homes that were bought by real estate investors as a percentage of all homes bought in the fourth quarter of 2021. All other data came from Redfin.

The city where investors are buying up the most real estate is Atlanta, GA. Here are the details:

> Homes bought by investors, Q4 2021: 32.7% of all sales
> Homes bought with all cash, Q1 2021: 39.8% of all sales
> Median sale price, Apr. 2022: $430,000
> Median time on market, Apr. 2022: 14 days

Click here to read Cities Where Investors Are Buying Up the Most Real Estate

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.