The Economic Effects of Real Estate Investors

Garriga, C., Gete, P., & Tsouderou, A. (2022). The Economic Effects of Real Estate Investors. Real Estate Economics, forthcoming.

80 Pages Posted: 7 May 2020 Last revised: 22 Dec 2022

See all articles by Carlos Garriga

Carlos Garriga

Federal Reserve Banks - Research Division

Pedro Gete

IE Business School; IE University

Athena Tsouderou

University of Miami

Date Written: November 21, 2022

Abstract

We show five new results about small and medium-sized real estate investors (SMREI) who participate through legal entities in U.S. housing markets. First, SMREI have the largest growth across all cities post Great Recession, in contrast to Wall Street Landlords who concentrate in superstar cities. Second, SMREI increase house price growth and price-to-income ratio, especially in the bottom price-tier. Third, this effect is reversed as investors trigger a medium-run supply response. Fourth, in areas with a high supply elasticity, SMREI affect rents more than prices. Finally, SMREI change the composition of the housing stock in favor of multi-family units.

Keywords: Institutional investors, house prices, housing affordability, supply elasticity, propensity to invest.

JEL Classification: E52, G11, R21, R31, R38

Suggested Citation

Garriga, Carlos and Gete, Pedro and Tsouderou, Athena, The Economic Effects of Real Estate Investors (November 21, 2022). Garriga, C., Gete, P., & Tsouderou, A. (2022). The Economic Effects of Real Estate Investors. Real Estate Economics, forthcoming., Available at SSRN: https://ssrn.com/abstract=3574001 or http://dx.doi.org/10.2139/ssrn.3574001

Carlos Garriga

Federal Reserve Banks - Research Division ( email )

P.O. Box 442
St. Louis, MO 63166-0442
United States
(314) 444-7412 (Phone)
(314) 444-8731 (Fax)

Pedro Gete (Contact Author)

IE Business School

Calle Maria de Molina 12, Bajo
Madrid, Madrid 28006
Spain

IE University ( email )

Calle Pedro de Valdivia 21
Madrid, Madrid 28006
Spain

Athena Tsouderou

University of Miami ( email )

P.O. Box 248094
Coral Gables, FL 33124-6552
United States

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