Massive 65% Crash in Real Estate Investor
New data from Redfin just reported a massive 65% Crash in Real Estate Investor Homebuying in 2023 in Las Vegas, to go along with a 45% decline nationally. In particular – the big Wall Street Investors like Blackrock, Blackstone, Invitation Homes, and Progress Residential are no longer buying in the US Housing Market.
Especially in cities like Charlotte, Atlanta, and Las Vegas, where investor purchases declined by over 60%. Investors are bailing on these markets because a combination of 1) higher interest rates, 2) higher vacancies, and 3) lower rents is making real estate investment a money-losing proposition.
The issue with Mortgage Rates is especially problematic. Because now the 30-year fixed mortgage rate of around 7% is way above the income yield (or cap rate) that investors get from their rental. So quite literally – real estate investors who buy today with debt are losing money on their property. And thus they’ve stopped buying.
But when will these big Wall Street real estate investors start selling? Because so far they’ve held onto their houses. And thus inventory on the US Housing Market is low. But I suspect eventually, as more houses sit vacant and the tax, insurance, and mortgage bills pile-up, more investors will be induced to sell.
Especially in a market like Nashville, where the investor purchases are down over 50% in the last year and the inventory on the market has surged.
Credit to : Reventure Consulting