A couple of years ago, one of the big stories in the housing world nationally was the way in which institutional investors were gobbling up housing and driving prices, well, through the roof. That was particularly true in North Carolina, where the housing market was red hot and corporate investors were focused on it.
However, that trend is now slowing down, and institutional housing investment has become a much less significant driver of housing prices.
One reason that’s particularly important in Guilford County is that the county is currently conducting a revaluation of the actual market worth of all real estate in the county – the new values will go on the county’s books in 2026 – and some homeowners feel that institutional buying is significantly artificially inflating the price of area homes.
Normally, it’s a good thing when the value of one’s house rises; the owner made an investment in a home and the value of that property has risen. Thus, a person’s net worth has increased.
However, there’s a hitch in that theory when it comes to Guilford County: Higher property values mean higher tax bills.
In many places around the country – and much of the time in Guilford County in the past – the higher assessed values of residences don’t cause extra pain in the wallet at tax time because the local government adjusts the tax rate lower so that tax bills remain the same, and the amount of revenue from that source stays the same (with the exception of additional revenue that comes from new property development in the previous year).
However, in Guilford County, the current Guilford County Board of Commissioners did not lower the tax rate after the 2022 revaluation, and Chairman of the Board Skip Alston has announced that there are no plans to do so for the upcoming revaluation.
So those people who, for instance, have no plans to sell their houses, will only end up paying more in taxes – and they will not benefit from the higher housing values.
Regardless, some property owners in Guilford County see institutional investors as a major culprit when it comes to rising prices; however, those investors currently own under 2 percent of the livable residences in the county and that percentage is no longer growing.
An institutional investor is a company or entity that invests in real estate on behalf of clients or shareholders. These investors may own thousands of single-family homes and other rental properties.
Around North Carolina as well, the trend of investment companies and other investors buying residential housing is trending down. Across the state, 7 percent of home sales were to an institutional investor last year, down from 7.4 percent in 2023.
While the percentage of institutional investment-owned properties in Guilford County shot up from 2021 to 2022, the percentage has remained level in recent years.
The first column is the number of parcels owned by institutional investors; the second is the number of residential parcels with living quarters. The last column is the percentage of institutional investor ownership for residential parcels with livable houses and structures.
2019 1719 166261 1.03%
2020 1748 167762 1.04%
2021 1743 169396 1.03%
2022 2693 169829 1.59%
2023 2873 171574 1.67%
2024 2893 172975 1.67%
In the first half of 2022, in Raleigh and Durham, out-of-state investors accounted for more than 4 percent of home sales, and more than 6 percent of sales in Charlotte, according to the Wall Street Journal.
In Raleigh, the share of investor sales from 2023 to 2024 went from 8.6 percent to 7.8 percent.
In the Durham metro area, the percentage did rise slightly, from 6 percent to 6.6 percent.
The trend is down nationally as well: According to The Wall Street Journal, In the third quarter of last year, only 0.3 percent of sales went to large institutional investors. If the first quarters of the pandemic were stripped out, that was the lowest percentage in seven years.
One reason institutional investors are slowing their grab of residences is that homes are priced higher than five years ago, making them less attractive buys.
If there is another massive property tax hike in Guilford County, the culprit will clearly be Alston and his co-conspirators (aka Democrats).
The Right represents the people; the Left represents government – and the greed of government is infinite.
Interesting observation. As the state income tax on Indi duals and businesses has steadily declined, more individuals and businesses have been locating (or relocating) in North Carolina, including Greensboro and Guilford County. But the excessive City and County taxes are evidently discouraging institutional housing investors. Simultaneously, I have read that Greensboro has been attracting refugees, newly released convicts and other “disadvantaged” residents with its “welcoming” support and benefits. If the future intended by current policies is actually growth, our current citizens should be asking themselves whether this is the kind of growth they want. It seems to me that the best possible growth would be the improvement of our middle class…
With property taxes going through the roof, and the Fire Departments not being properly funded why would they want to purchase homes here?