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Investors Remain Active in South Atlantic and Pacific Markets

Investors have been active participants in residential markets, especially after 2008. According to the April REALTORS® Confidence Index, 18 percent of respondents reported a sale to an investor. Taking a look over the past five years reveals that investors prefer specific regions of the country.

Data for the 2010-14 year-to-date period reveals that two regions tie for the top spot, having shown consistently high investor participation: the South Atlantic and the Pacific. Both regions average a 22 percent share of investors in the market. For the South Atlantic, 2014 figures are close to the five-year average (22%), whereas for the Pacific region, this year’s data shows a decline from the five-year average (20%).

The third area with a high share of investors is the Mountain region, which records a 5-year average of 20 percent. This is consistent with the post-recession housing rebound, as these regions comprise states with the highest price swings and strongest investor interest (FL, AZ, NV, and CA).

When looking at just the 2014 data, there are a few noticeable details. The most active regions this year for investor sales are:

  • West South Central: 21.9 percent
  • South Atlantic: 21.8 percent
  • Pacific: 20.1 percent

In addition, for the Mountain region, which has experienced strong investor interest over the past five years, 2014 is experiencing a slowdown. Investor purchases comprised only 17 percent of sales this year, compared with the 20 percent average over five years.

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Note: The states in each region are detailed below.
New England (CT, ME, MA, NH, RI, VT), Middle Atlantic (DC, DE, MD, NJ, NY, PA), East North Central (IL, IN, MI, OH, WI), West North Central (IA, KS, MN, MO, NE, ND, SD), South Atlantic (FL, GA, NC, SC, VA, WV), East South Central (AL, KY, MS, TN), West South Central (AR, LA, OK, TX), Mountain (AZ, CO, ID, MT, NM, NV, UT, WY), Pacific (AK, CA, HI, OR, WA).

George Ratiu, Director, Quantitative and Commercial Research

George Ratiu, Research Economist, writes regular economic columns and conducts research in the areas of commercial real estate, international investments, mortgage performance and foreclosures. He produces NAR’s Commercial Real Estate Outlook and manages quantitative surveys, including the Commercial Real Estate Quarterly Market Survey.

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