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Investor activity remains strong in real estate, despite institutional pullback

Institutional investors have cooled on residential real estate, but investor activity remains strong nationally and in the midstate, according to recent data from California-based RealtyTrac.

Investment home sales in the U.S were 36.8 percent in the first quarter — a new high and up from 31.4 percent a year ago.

In Harrisburg-Carlisle, investor sales accounted for 39.6 percent of homes sold in the first quarter compared with 25.5 percent in the opening quarter of 2014, according to RealtyTrac. In Lancaster County, it was nearly flat at 26 percent.

The commonwealth reported 38.6 percent investor sales compared with 30.6 percent in the first quarter of 2014.

Institutional investors — entities that buy at least 10 properties in a calendar year — dropped to 3.4 percent in the U.S. compared with 6.2 percent a year ago, the lowest share in four years.

By comparison, institutional buyers totaled 2.8 percent in Pennsylvania compared with 5.4 percent. And all-cash sales dipped to 27.6 percent compared with 44.2 percent, according to RealtyTrac.

In Harrisburg-Carlisle, institutional buyers were 2.8 percent of the market compared with 3.7 percent last year, while Lancaster County held steady at 2.1 percent.

Cash sales totaled 15.5 percent in Harrisburg-Carlisle in the first quarter, which was way down from 45.6 percent last year, according to RealtyTrac. In Lancaster County, cash was king in 19.1 percent of sales compared with 28.7 percent last year.

Translation: There are still a lot of smaller and mid-level investors buying a few properties and they are utilizing financing options from a growing network of national providers.

Total distressed sales dropped to 14.5 percent nationally in the first quarter compared with 21.4 percent a year ago, according to RealtyTrac. Locally, those figures were 15.7 percent from 21.4 percent in Harrisburg-Carlisle and 14.3 percent from 20.8 percent in Lancaster County.

Data was only available for metropolitan areas with populations of at least 500,000 with sufficient housing data.

Investor purchases were strongest in Cape Coral, Fla. (60.4 percent), Detroit, Mich. (59.3 percent), and Sarasota, Fla. (59 percent), according to RealtyTrac.

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