Fast-Rising Rents: Cause or Effect of Institutional Real Estate Investors?

More media attention for the growing influence of large, institutional investors on the housing market.

November 29, 2021, 8:00 AM PST

By James Brasuell @CasualBrasuell

Suburban Tract Homes

Roschetzky Photography / Shutterstock

Heidi Groover examines one of the big questions of the contemporary housing affordability crisis: to what degree are investors responsible for run away housing costs.

Groover places the question in context of the housing market in Seattle, and with the help of data and analysis recently published by Redfin. Here is the key finding for the Seattle area, as explained by Groover:

The share of Seattle-area homes sold to investors has climbed steadily over the past two decades — from about 3% in 2000 to 9% this fall — according to data released by Redfin this week. Other measures vary, depending on how “investor” is defined. Those range from 6% to 29% of all home sales.

Groover also notes that the trends apparent in Seattle are also occurring around the country:

Nationally, investors bought a record-high 18% of the homes sold in the third quarter of this year, and investors increasingly turned to single-family homes, according to Redfin.

Despite the growing number of investors buying up homes, the verdict is more nuanced than blaming investors alone for skyrocketing housing prices:

Still, investors alone can’t explain Seattle’s increasingly out-of-reach housing market. Individual buyers with cash from stocks or the sale of their last home drive bidding wars, sometimes with all-cash offers.  

In the feature-length source article linked below, Grover provides a lot more anecdotes, data, and insight into Redfin's recent study, as well as the real estate market around Seattle.

For more background, Planetizen has been tracking the emerging awareness of institutional investors in the housing market since 2019, including a deep dive into the subject in April 2021.

Saturday, November 20, 2021 in The Seattle Times

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