According to a Dublin Realtor, the last few years have been quite interesting for the real estate market. Thanks to rising interest rates, many existing homeowners are reluctant to sell and buy a new home because they are locked into a lower rate. This is keeping inventories low across the country: according to the National Association of Realtors (NAR), housing inventories are expected to remain tight in 2023, with housing inventories are expected to remain tight in 2023, with housing starts below historical averages and fewer homeowners willing to sell.
This lack of inventory is helping to keep housing prices elevated: the Mortgage Bankers Association reports the national median mortgage payment for April 2023 was $2112, up from $2093 in March and $2011 in February. This is considered by many the least affordable market on record.
The Rise of Investment Firms
Another reason for low inventories is the continued cash purchase of single-family homes by investment firms:
- According to MetLife Investment Management, banks, large real estate firms and other institutional investors are expected to own 40% of single-family rentals in the US by 2030.
- The housing market shortage could make it easier for banks and other Wall Street investors to buy up and rent out single family homes, according to National Association of Realtors Chief Economist Lawrence Yun.
In the 4th quarter of 2021, Redfin reports institutional investors bought more than 80,000 homes, spending nearly $50 billion. This was 18.4% of all homes purchased in the U.S., with 75% of them being single family homes. American Homes for Rent, Blackstone, Progress Residential, Invitation Homes, Tricon, FirstKey, and Amherst Residential are some of the investment companies that are purchasing single family homes across the country.
Homeowners are Fighting Back
Many believe home purchases by rental investors lead to a decline in property maintenance, which can make their properties less desirable. In addition, the ability to pay cash for houses makes it more difficult for families to buy their dream home. The reduction in renters is believed to help decrease crime in the area and keep the neighborhood tidy.
Since 2022, homeowner associations across the country have been fighting back against investment firms. Here are some strategies used by homeowner associations to decrease investment firm ownership:
- Limiting the number of homes that can be rented in a particular neighborhood
- Approval of rental tenants by the association board on a case by case basis
- Buyers must live in the home a minimum of 6 months to 2 years before renting it out
In addition, lawsuits are being filed against these firms. In 2022, Minnesota attorney general Keith Ellison sued Progress Residential for skimping on repairs and “systematically misrepresenting its property-repair practices and keeping its properties uninhabitable for tenants.”
“I filed this lawsuit because it’s my job to protect Minnesotans from fraud and abuse, and tenants are consumers of housing who are entitled to the same protections as all consumers. HavenBrook’s (a Progress Residential subsidiary) strategy of extracting profit from their tenants by claiming to provide them with prompt, high-quality maintenance and repair but actually leaving them in uninhabitable homes isn’t just shameful, it’s deceptive, fraudulent, and violates Minnesota law. I’m holding them accountable for it.”
Summary
If housing trends continue, some analysts believe investment firms could control nearly 40% of the single-family homes in the US. To prevent this from happening, many HOAs are working to limit their ability to purchase their properties. Thanks to rising interest rates, an uncertain economy and tight inventories, the next few years will be an interesting time for the housing market.
About Dublin Realtor of Range Homes
Are you looking to buy or sell a home? Need help determining your next move? Having a licensed real estate agent is essential. Here at Range Homes, we have helped our customers buy and sell homes for years. We also have great market data to help you pick the perfect area and are ready to help you find your dream home during these unprecedented times. Contact us HERE for your real estate needs.
Why Dublin CA?
Dublin CA is known for its good economy, beautiful landscapes, and extremely popular housing market. When other states and territories have experienced a decline in housing prices the Bay Area, in general, has remained strong. This doesn’t mean you should not diversify your portfolio across many states, but Dublin Realtors agree that this is certainly a strong place to start for a novice investor. There are even some great low-cost homes that are ripe for renovation.
We have a team of friendly, helpful Dublin Realtors that specialize in East Bay CA real estate and property sales that can help you work out how to best get your property portfolio started. Our agents are here to put your needs first, get you the best deals and offers, help you buy or sell your dream home and build your investment portfolio. Reach out to our team today to find out your options.
If you are looking to find a Dublin Realtor, looking for homes for sale in East Bay CA, or even to sell your home with someone who will make sure you get the best deal and understand your needs – look no further – when you work with us, consider yourself family.
