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Institutional investors might flip homes and price out some would-be homebuyers, and they might be markedly worse landlords. And they already have exactly the same incentive.
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Oh for sure, but the largest investor isn't Blackrock. Want to stop them? Build more homes, ensure that they cannot have a large market share and engage in predatory behavior, and reduce the incentive for yield chasers to further commodify the market. They are profit maximizers and face strong pressure to return large gains to shareholders. And the main reason it has become so profitable is the preexisting housing shortage created by local governments and certain homeowners seeking to block new homes from being built, leading to a nearly 4 million home shortage nationwide. Yield-chasing investors have turned to the real estate market because it has become a very profitable place to put your money. While there are big firms for apartments and other multi-family housing units, there traditionally hasn’t been the same level of investment in single-family homes. It’s important to understand that institutional investors play a small role in the American housing market. The Left will ignore this, because Blackrock has committed to "racial audits" and other diversity BS. Vance, the Hillbilly Elegy author making a play for an Ohio US Senate seat, to accuse “The Left” of ignoring the situation because of BlackRock’s corporate diversity initiatives.īlackrock is pursuing an investment strategy that will make it harder for young Americans to own homes. and outbidding normal home buyers” went viral, prompting even J.D. Inman writes that consumers are “increasingly competing against institutional investors.” And the Real Deal goes further, claiming that one of the “main reasons for the skyrocketing prices are actually a huge buying spree from institutional investors.”Ī recent Twitter thread blaming BlackRock, the world’s largest asset manager, for buying “every single family house they can find. The Wall Street Journal wrote earlier this year that “yield-chasing investors are snapping up single-family houses” and “competing with ordinary Americans.” Marketplace reported the same, noting one buyer had been outbid six times by all-cash offers. Some people are furious over reports that institutional investors (often private equity firms) are increasing the demand for homes and pushing prices upward. And to top it all off, the rich just keep getting richer: The stock market is booming, homeowners have accumulated more than $1.5 trillion in equity since the Covid-19 recession began, and personal savings are up for most higher-income households. Countless tenants don’t even have that dream, chafing under the increasing rent burdens they are forced to bear. Housing prices have yanked the dream of homeownership out of the desperate, clutching hands of millions.