Everybody Wants a Piece of the Housing Crunch
March 30, 2022 | Jack Rogers | GlobeSt.com
In the housing boom that preceded the financial collapse of 2008, everybody wanted a piece of the housing bubble, including banks that bundled subprime mortgages into speculative instruments and house flippers who could turn a property around before the first loan payment came due.
Everyone made a ton of money, until the music stopped and the bubble burst.
In 2022, the race to invest in houses is being fueled by the highest inflation rate in 40 years—driven by stratospheric increases in housing prices, including home prices and home-rental prices—coupled with a record tight inventory of available housing.
Large institutional investors and publicly traded rental firms like Invitation Homes, who have been making high-profile purchases of thousands of houses to increase their SFR portfolios, have been fingered as prime culprits for the supply crunch that is shutting first-time home buyers out of the market in many areas.
But a closer look at the hottest markets reveals that small investors, including new mom-and-pop landlords who used their home equity to buy property for SFR, are outperforming the larger players in single-family house purchases.
According to a new report from Bloomberg, mom-and-pop landlords far outnumber new institutional homeowners in several markets where home prices have increased the most, including Phoenix, Atlanta and Tampa.
In Phoenix, 32 percent of single-family purchases in January were by investors with fewer than 10 properties, according to data from John Burns Real Estate Consulting. Large investors were involved in 12 percent of single-family transactions in Phoenix.
