Investor demand in the US Housing Market is near all-time highs according to recent data from Redfin. In the 2nd Quarter of 2021 over 15% of home sales in the US were to iBuyers like Zillow and mom & pop flippers, while over 20% of all affordable homes were sold to investors. These figures are all-time highs!
Higher investor demand is pushing out American families from the housing market and perpetuating the Housing Bubble further. Particularly in cities such as Phoenix, Miami, Jacksonville, Charlotte, and Atlanta – markets where nearly 25% of all homes sold in Q2 2021 were to real estate investors. At the other end of the spectrum are markets in the Midwest, such as Chicago and Pittsburgh, which have a low share of investor sales.
It’s no accident that the Phoenix Housing Market and Miami Housing Market have such high investor sales. These markets have been attracting investors for decades, and they are historically volatile as a result. Both Phoenix and Miami experienced 50% Housing Crashes during the last bust that occurred from 2007-12.
It’s very likely that these markets, along with any others that have a high share of iBuyers and other investors, also have more downside in a Housing Crash situation. This is because it’s very easy for investors to list their homes for sale, whereas it’s not as easy for an owner-occupant to list. And since an investor is a profit-maximizer, they will likely choose to sell the home in the event of a crash, thereby making the crash worse.
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Redfin Article:
Investor Home Purchases Hit Record, Surpassing Pre-Pandemic Levels
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0:00 Zillow & Blackrock Taking Over?
1:20 ALL-TIME HIGH for Investor Demand
2:39 Affordable Homes are GONE
3:42 25% of Homes to Investors? 5 Cities
6:04 Long-Term Impact of Investors
7:14 Option A or Option B
9:04 Investors more likely to Pick Option A
11:00 RECORD LOW Cash Flow Yields
12:31 Sell, Sell, Sell!
14:02 Setting the Record Straight
15:38 Do These 3 Things!
#Zillow #WallStreet #HousingCrash