Good afternoon —
As conspiracy theories go, it's easy to understand the appeal of the one that says Wall Street investors are buying up all the homes in the U.S.
Thanks to ultra-low interest rates and lots of Millennials hitting peak home-buying age, housing demand is through the roof. At the same time, people are living in their homes longer and builders are being careful about how much they build, so supply can't keep up with demand. The resulting bidding wars result in lots of discouraged buyers.
In that scenario, it's easy to imagine you're getting beat by Wall Street investors with deep pockets who are looking to set up the next Pottersville.
In reality, the number of homes bought by investors has increased in the last year, but it's still within the normal range of 10-15%, according to RealtyTrac (using data from ATTOM). In addition, investors are on average paying less than consumers, which may indicate they are buying mostly fixer-uppers or other housing that's less attractive to owner-occupiers.
So, if not Wall Street, can we at least blame iBuyers?
After all, their signs are everywhere and they make it oh so easy to sell to them. However, the iBuyers' strategy is to get those homes back on the market as quickly as possible — they don't make money by buying and holding. (And Zillow, for one, has decided to pause their iBuying so they can do more iSelling).
Really, there's only one group I think we can all agree to blame: Californians. Whether to close-in markets like Boise, new frontiers like Austin, or even to the far reaches of Vermont, Californians are on the move, wreaking havoc on reasonably priced housing markets from coast to coast. I just spent the last week in the state's sunny south and I'm both jealous and doubtful they're going to enjoy the weather anywhere else.
But no matter — this is one conspiracy theory I can get behind.
Until tomorrow —
Sarah Wheeler
HousingWire Editor in Chief
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