Big investors across the country are buying up more residential real estate in metro areas, and that trend holds true for Baton Rouge as well.
Home ownership is the most important way Americans build wealth, and the high investment activity could impact already low home affordability.
Kyle Petersen, a real estate agent with Keller Williams First Choice, works with two residential investing companies that buy in the Baton Rouge area. Both have been buying at least one home a month, he says, where prior to the pandemic they were purchasing one a year.
A lot of that jump is due to low interest rates, he says, but the investors are also currently flush with cash. They’re not as concerned about appraisals being a contingency, he says, and can win multiple-offer situations because they’re paying with cash, which is attractive to sellers.
They’re also buying up more homes in the area around the planned Amazon fulfillment center—in neighborhoods like Broadmoor and Sherwood Forest—because of its potential as a center for job growth.
Owner-occupiers are having to compete more with cash-rich investors when it comes to buying homes, Axios reports, and the share of homes sold to investors hit a record high of 18.4% in the fourth quarter. Affordability across the country has fallen as home supply remains short.
But Petersen doesn’t think these local investments impact affordability and says the companies he works with are paying market price or above, not $10,000 or $20,000 over.