Investment firms buy up the neighborhood
Future. Families looking for homes are increasingly competing with cash-rich Wall Street firms that are not only taking supply in record numbers, but also buying homes before they even hit the market. There’s not much the average buyer can do, but the housing-shortage could put pressure on local governments to enact stricter oversight in order to make sure that the homeowners in their communities are actually part of the community.
It’s getting harder for people who actually want to live in homes to get them, thanks to large investors looking to turn a profit.
- According to residential brokerage firm Redfin, investors like Invitation Homes, American Homes 4 Rent, iBuyer, and Opendoor spent a massive $77 billion on homes in the past six months.
- That’s 40% more than was spent in the second and third quarters of 2020.
- 55,000 homes were snapped up just last quarter.
Some of the most popular cities include Miami, Atlanta, Las Vegas, Phoenix, and Charlotte.
“Where am I supposed to live?”
While low interest rates and fresh capital are sending Wall Street investors on a spending spree, would-be homeowners looking to finally enter the housing market are suffering. COVID sent a lot of people to the suburbs, looking for space and privacy as the workforce shifted to remote employment. But as investors continue to take so much supply, homes have either been hard to come by or too expensive to make financial sense.
Even more frustrating is that many of the homes for sale don’t even hit the open market. New companies like Offerpad and Zillow have convinced sellers to make off-market deals… making the supply pool feel even smaller than it really is.