How Wall Street Investors Rescued the Market for Single Family Homes
35 Pages Posted: 1 Oct 2019
Date Written: February 21, 2019
We examine the impact of house purchases by large buy-to-rent investors on the value of nearby properties. Returns on repeat sales of properties within a quarter mile of houses purchased by buy-to-rent investors were significantly greater if the repeat sale concluded after the buy-to-rent purchase rather than before. Properties outside the price range normally paid by buy-to-rent investors experienced smaller gains after nearby buy-to-rent purchases. Mortgage use increased after the buy-to-rent purchases for nearby properties. Buy-to-rent investors appear to increase the value of homes in an area by providing liquidity and reducing the local supply of houses.
Keywords: institutional investor, residential market
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