Elgin Area Chamber Of Commerce: Investors Buy Homes At Record Pace, Existing Home Sales Rise, Dickey's Virtual Brand Gets Physical

Press release from the Elgin Area Chamber of Commerce:

July 26, 2021

Investors poured tens of billions of dollars into buying single-family homes and condominiums, reaching a record during the second quarter.

Residential real estate firm Redfin reported that investors snapped up 67,943 houses in the quarter that ended June 30, the most in the 20 years the firm has been able to pull data. That’s a 15.1% increase from the first quarter.

Investors also set a quarterly record for spending at least $48.5 billion on homes, nearly $10 billion more than the first quarter, but the figures may be low. Redfin said it analyzed the 50 most populous metropolitan areas but could only include 41 in the results because some municipalities don’t disclose sales prices, as is the case in Texas.

On average, investors bought roughly one of every six houses sold last quarter, nearing pre-pandemic levels for market share. In Phoenix, though, 24.5% of home sales in the quarter went to investors, the highest among the areas Redfin analyzed, followed by Miami and Atlanta.

Redfin said the typical price investors paid for a home was $439,600, which is higher than the median sales price of all existing homes sold in June at $363,300. In addition, about 74% of investor home purchases in the second quarter were all-cash deals, the highest level since 2018, according to Redfin.

"Investors see soaring home prices as an opportunity," said Sheharyar Bokhari, Redfin’s senior economist, in a statement. "With housing values consistently on the rise, solid returns are pretty much guaranteed, especially when you're an investor who has access to extremely cheap debt."
Existing Home Sales Rise

Sales of existing homes resumed growing in June after four months of declines, while median home prices rose to another record.

The National Association of Realtors reported Thursday that sales increased 1.4% in June from May to an annual rate of 5.86 million. Though up, the space remains slower than at the end of last year and into the early months of this year.

Prices have soared because of a combination of increased demand and dwindling inventory. The median price now stands at $363,300, a 23.4% increase from a year earlier.

The high prices slowed the torrid pace of sales, particularly among first-time homebuyers even though mortgage rates are at all-time lows.

At some point, analyst say, a growing inventory of homes for sale will help bring down the high prices. In June, inventory increased 3.3% from May, but it's still 18.8% lower than a year earlier.

Dickey’s Virtual Brand Gets Physical

Dallas-based Dickey’s Barbecue is converting a virtual restaurant brand it started several months ago into brick-and-mortar locations.

The first Wing Boss is scheduled to open in September in Addison, Texas, a Dallas suburb. It will fill 1,500 square feet in a strip center that already has a Dickey’s.

Dickey’s, which has more than 500 locations around the country, launched Wing Boss in March to help franchisees with a concept that drives revenue to stores affected by the pandemic.

It also started Big Deal Burger, another virtual brand at the same time and is considering a third virtual concept dubbed Trailer Bir

This press release was produced by the Elgin Area Chamber of Commerce. The views expressed here are the author’s own.