I see a lot of expensive houses being built in my area. A LOT. And the weird thing is that they’re being bought pretty quickly. Are these people just making more money than me? If so, what are they doing for a living? Or are they just living house poor? How exactly are they affording these places?
Edit: For reference, my neighborhood is starting to become popular (because the other popular neighborhoods have priced most people out of affording places there). The normal price of newer homes here is $700k. My home, built in 1965, which is 2500sq ft on a quarter acre of land, is $500k.
I feel like this article didn’t do a great job of answering the question. They didn’t really determine whether big corporations are buying homes, they determined that investors are buying homes. The actual text:
Those two statements are not equivalent. “Investor” could be a single individual buying a home with the intent of offering it as a vacation rental when not in use. It could be somebody who bought a duplex and rents the other unit out until their parents retire. It could be a house flipper who does 1 house at a time – each time registering an “investor purchase”.
Even “corporation” doesn’t really mean anything; a “corporation” could be an LLC with one employee, the owner.
And even when big corporations buy single-family homes, it’s not clear to me that this has a lasting economic impact. It sounds like a lot of these investment companies are renting the the homes or flipping them. Ultimately, demand is still demand. Somebody has to be there to buy or rent the home for these investments to make sense, so any price increase resulting from this investment activity is not an external, artificial pressure. It’s a real representation of economic value, it is a price that the next occupants are willing to pay.
I have a very specific viewpoint on this issue, as I live in a vacation destination. Various investors are buying up every property that comes up for sale in my community (large corporations, small companies, wealthy individuals looking for vacation homes, etc.)
Every single property that gets bought, gets renovated or otherwise improved to the point that there’s no chance in hell anyone living and working in the community full-time can afford to buy, unless they bought their first property before 2016. Since then, home ownership among my colleagues has become a pipe dream (and without giving away too many personal details, let me just say my colleagues and I are well-educated professionals making way above the median income for jobs in the area).
As I type this out, I’m listening to a million-dollar house being built in the lot behind me (which will almost certainly sit vacant >80% of the time), a shit rental being turned over next door (which charges $3k/mo for a 3/1.5), and two short-term vacation rentals partying across the street (which usually charge at least $300-$400/night).
Regardless of who it is, investors buying up housing is a huge problem for people that are trying to own their own home, especially first-time buyers.