Big Firms are Crowding the Market For Houses and Driving Up Prices
The Wall Street Journal (reposted on Realtor.com) recently wrote about how so-called big firms are crowding out the market for houses and in the process, driving up prices. They report that it runs the gamut from individuals with smartphones and a few thousand bucks to pensions & private-equity firms with billions, yield-chasing investors are snapping up single-family houses to rent out or flip. In fact, in suburban Houston, TX instead of biding wars for just just one home, the entire subdivision was sold. The winning bid of $ 32 million came from none other than the online real estate investing platform Fundrise, which the WSJ says manages more than $ 1 billion on behalf of about 150k individuals. Indeed…
“You now have permanent capital competing with a young couple trying to buy a house,” said John Burns, whose eponymous real estate consulting firm estimates that in many of the nation’s top markets, roughly one in every five houses sold is bought by someone who never moves in. “That’s going to make U.S. housing permanently more expensive,” he said.
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