Did Investors Get Unfairly Blamed for the Housing Crisis of 2020-2021? A Retrospective Look
Did Investors Get Unfairly Blamed for the Housing Crisis of 2020-2021? A Retrospective Look
As the real estate market continues to recover from the tumultuous events of the past year, it's worth reflecting on the role that institutional and mom & pop investors played in the crisis. Were they unfairly blamed for the struggles that homeowners and buyers faced? And what can we expect to see in a more stable, but not necessarily favorable, market moving forward?
In the immediate aftermath of the pandemic, there was a lot of finger-pointing and blame being thrown around. Many people pointed to investors as the source of the problems in the housing market, blaming them for driving up prices and making it impossible for first-time buyers to enter the market. However, a closer look at the data reveals a more nuanced picture.
According to the National Association of Realtors, there was an increase in downsizing sellers who were moving closer to their families, which put additional pressure on the starter home market. At the same time, the millennial buyers, much like in the automotive industry, have been shifting their attitudes towards rental properties as the cost of living continues to outpace income growth. This is reflected in the National Multi-Housing Council's recent report, which showed that rental demand has been increasing steadily since 2018, with a spike in 2020 due to the pandemic.
While it is true that institutional investors and private equity firms have been buying up properties in bulk, these investors are not necessarily the problem. In fact, they play an important role in the market by providing liquidity and keeping prices stable. They are also offering new opportunities for home ownership, such as rent-to-own programs and short-term rentals for the traveling workforce, filling in the gap in areas where the covid pandemic has decimated its workforce.
It's also worth noting that there are various forms of these investors, and not all of them are playing a negative role in the market. For example, the National Association of Home Builders' latest report showed that single-family rental properties have been a bright spot in the housing market, providing much-needed housing for renters and helping to stabilize prices in areas where there has been a shortage of homes for sale.
So, what can we expect to see in a more stable market moving forward? With the market becoming more balanced, we may see longer days on market and a situation where only the nicest houses stand out. The key to navigating this market is to work with an experienced, investor-focused real estate agent who understands the investment side of real estate and has the tools and resources to help you make informed decisions.
In conclusion, the housing market can be a challenging and complex place. However, as a homeowner, you can make informed decisions and achieve your real estate goals with the help of a knowledgeable and experienced real estate agent. If you're considering selling your home, I highly recommend checking out my article "6 Reasons Homeowners Should Start Their Sales Process With ExpressOffers (Before Listing)". This article highlights the benefits of working with an investor-focused real estate agent and why starting your sales process with ExpressOffers may be the best decision for you. Don't miss out on this opportunity, reach out to me today to receive a cash offer on your home.