by Elizabeth Troutman
Phoenix was the most popular migration destination in the second quarter of 2021 for users of Redfin.com, a technology-powered real estate broker, who were looking to move to a different major city.
In Phoenix, institutions or businesses that purchase residential real estate, known by Redfin as investors, purchased 24.5% of homes sold in the second quarter of 2021. Redfin said that out of the 41 U.S. metropolitan areas analyzed, Phoenix had the highest percentage of home purchases by investors. The Valley was followed closely by Miami, Atlanta, Charlotte, North Carolina, and Las Vegas.
According to Redfin, real estate investors purchased 67,943 U.S. homes in the second quarter of 2021, a 15.1% increase from the first quarter. Investors bought a record $48.5 billion worth of homes, up from $38.9 billion in the first quarter and $20.9 billion the previous year due to the stalled housing market during the COVID-19 pandemic. In addition, the price of the typical home purchased in the second quarter increased from last year by 23.7%, the Redfin report said.
“Investors see soaring home prices as an opportunity,” Redfin Senior Economist Sheharyar Bokhari said. “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.”
Redfin wrote that investor market share has almost returned to pre-pandemic levels. Investors bought approximately one of every six homes purchased in the second quarter of 2021, only 0.2% short of the record market share they held in the first quarter of 2020 before the pandemic.
Migration statistics released by The Internal Revenue Service in late May showed that Arizona gained 218,736 new taxpayers between the 2018-2019 tax years. They lost 152,769, marking a net gain of 65,967 exemptions from one tax year to the next. Those added taxpayers represent $3.8 billion in annual gross income. Of the incoming taxpayers, 22,717 earned at least $75,000 that year.
The majority of the new taxpayers migrated from California, at 29,050 after subtracting those who went the opposite direction. The nation’s most populous state lost more taxpayers than any other, subtracting 165,355 on net and causing them to lose a congressional representative. Still, the California Department of Finance estimated that California lost only 0.46% of its population in 2020.
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Elizabeth Troutman is a contributor to The Center Square.
Photo “Real Estate” by Reza Etemad.
