Big investors buying fewer homes in Charlotte

Wall Street-backed investors are still snatching up homes in Charlotte — but below the pace they were this time last year. And way below the pace from this past summer.

Institutional investors bought 14.9 percent of all residential properties sold in the Charlotte metro area in January, down from 16.9 percent a year ago, according to a report this week by RealtyTrac. January's figure did, however, represent a rise over December's 13.4 percent.

RealtyTrac defines an institutional investor as one that buys at least 10 properties in a calendar year. Such investors, backed by private equity, bought thousands of homes in Charlotte last year to rent them out. In cases where the properties were already rentals, the new owners have raised rents and been quick to start the eviction process for tenants who miss payments.

The year-over-year slowdown in the purchases come as home prices continue to post sizable annual gains and inventories continue to shrink. This week, the Standard & Poor’s Case-Shiller home price index reported 7.8 percent appreciation in the Charlotte area in December compared with a year ago.

The slowdown has been seen nationwide, too: Institutional investors bought 5.2 percent of U.S. residential properties sales in January, down from 8.2 percent a year ago and down from 7.9 percent in December.

“Many have anticipated that the large institutional investors backed by private equity would start winding down their purchases of homes to rent, and the January sales numbers provide early evidence this is happening,” RealtyTrac's Daren Blomquist said in a statement.

In the Charlotte region, the actual number of properties bought by institutional investors totaled 318 in January versus 376 a year ago. Those figures include sales of distressed and nondistressed properties.

Compare those numbers to 687 institutional investor purchases in July, last year's peak for our region.