How Wall Street Investors Rescued the Market for Single Family Homes

35 Pages Posted: 1 Oct 2019

See all articles by Walter D'Lima

Walter D'Lima

Old Dominion University

Paul H. Schultz

University of Notre Dame - Department of Finance

Date Written: February 21, 2019

Abstract

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

Suggested Citation

D'Lima, Walter and Schultz, Paul H., How Wall Street Investors Rescued the Market for Single Family Homes (February 21, 2019). Available at SSRN: https://ssrn.com/abstract=3457303

Walter D'Lima (Contact Author)

Old Dominion University ( email )

Norfolk, VA 23529-0222
United States

Paul H. Schultz

University of Notre Dame - Department of Finance ( email )

P.O. Box 399
Notre Dame, IN 46556-0399
United States
219-631-3338 (Phone)
219-631-5255 (Fax)

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