CHARLOTTE, N.C. — At her first meetings with clients, many hoping to buy a first home, Sarah Ortiz Hilton runs through a list of warnings.
They may have to offer tens of thousands of dollars over the asking price only to have those offers rejected anyway, Ms. Hilton, a real estate agent, tells them. They might have to put up thousands of dollars in nonrefundable fees to get a seller to consider their offer. And if they’re looking for a home for less than $300,000, they might be out of luck.
In part, her cautionary message reflects the red-hot housing market, rising interest rates and limited supply around the country. But particularly in booming Sun Belt markets like Charlotte, it also reflects something else: the increasing influence of real estate investors buying up houses, especially at the lower end of the market, and turning them into rental properties.
In cities like Charlotte, that trend is exacerbating the shortage of houses for sale, driving up prices and putting homeownership out of reach for many first-time buyers, the biggest losers in today’s market.
93 percent of homes purchased by corporations as of May 2021 were bought for under $300,000. Many of them were in predominantly Black neighborhoods.
purchased more than 30 percent of the homes sold in the fourth quarter of 2021, according to Redfin. In Jacksonville, Fla., Las Vegas, and Phoenix, they bought just under 30 percent.
Housing industry representatives note that these numbers, which define investors as any institution or business, represent purchases by smaller, local owners, too, who may own just one or two buildings through a limited liability company.
For decades, Marjorie Parker knew all of her neighbors in the east Charlotte neighborhood of Hidden Valley. Living there wasn’t always easy, as gang violence periodically rattled the streets. But Ms. Parker found comfort in the strength of the community and the economically stable, middle-class life it afforded Black families.
The first change she noticed was the fliers outside her door. They offered to buy her home for cash. Soon her phone began ringing multiple times a day with calls offering the same.