Real Estate Investors across America have own nearly 20 Million Homes according to data from the US Census Bureau and Redfin. Especially in certain housing markets such as Atlanta, Los Angeles, and Las Vegas, where investors are buying over 50% of homes in certain neighborhoods.
Investors stimulate local Housing Markets in the Bubble, causing prices to go up further and inventory to go down, cresting a Housing Crisis. But in Housing Crash the presence of investors make the Crash WORSE.
For instance – the ZIP Codes across the Atlanta Real Estate Market with the highest investor ownership are also the ones with the biggest declines in value during the last Housing Crash from 2007-12.
Why? Well, a high share of investors means a low share of primary owners who live in their homes. This means more speculation in the local Housing Market and a bigger “sell-off” in investor-driven areas when the Housing Crash begins.
But it’s not just cities like Atlanta, Los Angeles, and Las Vegas. Markets such as Jacksonville and Charlotte also have a very high share of investor home purchasing, particularly in some neighborhoods with over 50% investor ownership.
On the other end of the spectrum are cities like Washington DC, Philadelphia, and Minneapolis, which have fairly low share of investor demand (nearing 10%).
Redfin Investor Data: https://www.redfin.com/news/data-center/new-construction/
2018 Census Rental Survey: https://www.census.gov/data-tools/demo/rhfs/#/
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