LOS ANGELES – Rising property prices and rents are fueling real estate companies’ appetites for homes and creating undesirable competition for many potential homebuyers.
Residential properties purchased by corporations or institutions hit an all-time high of 67,943 properties in the second quarter, according to Redfin, a Seattle-based online broker.
That is more than doubling compared to the previous year, when the pandemic temporarily paralyzed the real estate market. It also accounts for 15.9% of all homes sold in the April-June quarter, or just below the record high of 16.1% of sales in the first quarter of 2020, Redfin said.
The data, which dates back to 2000, covers all types of residential property, including apartment buildings and condominiums. Purchases by small individual investors are excluded.
Just looking at single-family home sales, businesses accounted for 16.1% of all purchases in the second quarter, Redfin said. Ten years ago it was 8.4%.
The trend is challenging potential homebuyers, especially many first-time buyers who are already facing fierce competition for affordable homes at a time when real estate inventory is near all-time lows and prices continue to rise.
The S&P CoreLogic Case-Shiller 20-City Property Price Index climbed to a record 19.1% year-over-year in June as too few homes are available for sale and low interest rates have enabled wealthy buyers and property investors to pay more.
“If you have investors in a limited supply market and they come with cash, they can outbid any regular homebuyer.” said Sheharyar Bokhari, senior economist at Redfin.
The influence of real estate investors on the single-family home market is particularly noticeable now as competition has become so intense that homes are often sold within a few days.
“Apartments don’t stay on the market for long” said Bukhari. “People get frustrated when they lose bid wars, especially when they lose to a (company) with cash.”
Real estate investment trusts and other businesses traditionally own condominiums, but the housing crisis in the mid-2000s helped usher in a wave of Wall Street investments in former single-family homes.
Mutual funds like Blackstone Group bought thousands of foreclosed and distressed homes. Many of the properties have been converted into rental apartments. And although the housing market has more than recovered since then, a shortage of apartments for sale and increasing demand for rental apartments have motivated Wall Street to invest their investment in renting single-family homes rather than selling them during the housing market, according to you are thirsty inventory.
Blackstone Group, which spun off single-family home rental Invitation Homes in 2017, agreed to buy Home Partners of America, which buys homes and then rents, in June.
For some potential homebuyers frustrated by the most expensive housing market in decades, renting a home is the next best thing, and that helps drive rents up, which rose 7.5% nationwide in June, according to real estate data company CoreLogic. have risen.
Not all real estate companies are involved in the rental of houses. Many flip houses are buying them. And there are so-called “IBuyers”, Companies like Zillow, Redfin, and Opendoor that buy homes, typically from sellers who want to sell their home quickly, and then put the homes back on the market.
However, according to data from Realtor.com, investors bought more homes than sold nationwide in the first half of this year.
“They added inventory in the first few months of the pandemic, and so did the spring and early summer months of 2019, but in general we saw more investor buyers than we did during most of this data history.” said Danielle Hale, Realtor.com’s chief economist.
The competition that potential homebuyers face from major real estate investors is hoped by the Biden government as part of a broader initiative aimed at addressing the housing shortage and easing price pressures in the housing market.
Last week the White House announced that it had directed state home finance agencies to give buyers and nonprofits an exclusive 30-day window to submit bids on more than 12,000 homes that were unsold in foreclosures.
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source https://www.bisayanews.com/2021/09/11/in-a-hot-market-companies-compete-with-would-be-homeowners-news-sports-jobs/
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