Corporate Investors Taking Over

There has been a very significant increase in the number of listings under contract between $400K and $500K.

The red line is 2021, the green is 2020 and yellow is 2019. The date is in DD/MM/YYYY format because I captured it from my screen in the UK and Tableau automatically adjusts dates for the user's location.

This situation is similar for $500K to $800K but not quite so striking.

Outside the price range $300K to $800K there is no increase and the red line is far below the green one.

I believe the primary cause is the buying spree that the iBuyers are indulging in, but they are not the only buyers competing for homes in this price range, which now dominates the market.

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You've probably seen the press around BlackRock and other institutional bulk home purchases. For example, this excerpt from a recent article:

'In the first quarter of 2021, 15% of U.S. homes sold were purchased by corporate investors — not families looking to achieve their American dream. While they’re competing with middle-class Americans for the homes, the average American has virtually no chance of winning a home over an investment firm, which may pay 20% to 50% over asking price, in cash, sometimes scooping up entire neighborhoods at once so they can turn them into rentals.'

Reminds us of the Orwellian great reset - 'you will own nothing and you will be happy.' Doesn't sound like the 'great reset' will be good for our industry! 

And we should probably stop there.

Looking at the price ranges above the $400-500K range we still see the same trend, namely, Listings Under Contract in 2021 YTD significantly outperforming 2020 and 2019.

Same is true over $1M:

And over $2M:

While there is the legitimate question of institution buyers squeezing out first time buyers and the subsequent consequence of appreciation in terms of affordability, the local housing market continues to be very robust across the board, albeit the $400-500K takes the prize in this monsoon moment.