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Institutional money in RE

2,286 Views | 13 Replies | Last: 3 yr ago by Red Pear Realty
Less Evil Hank Scorpio
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1:08p, 6/10/22
AG
My friends have been talking about this more and more lately and one of them posted this today in our group chat:

https://www.tiktok.com/@glenndabaker/video/7106864711429377323?_t=8T3CDqsjlud&_r=1

People in the industry, do you agree that this is a growing issue for regular homebuyers? What are the pros and cons of some sort of regulation in this space? If its true that over 60% of houses under $500,000 are being bought by institutions that seems like a paradigm shift with the potential for unforseen consequences, but I'm not sure what to make of it, or if its really true.
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12thMan9
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1:22p, 6/10/22
AG
You're looking at tiktok for intelligent thoughts?
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Less Evil Hank Scorpio
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In reply to 12thMan9 • 1:24p, 6/10/22
AG
No, I was sent a link to a TikTok that makes some bold claims and I was coming here for more intelligent conversation about it.

Instead of criticizing the website its posted on why can't we talk about the actual content?
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SoTheySay
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1:40p, 6/10/22
S
Glendda Baker is basically a GOAT. I trust what she says - whether her platform is TikTok or not.
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pocketrockets06
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1:43p, 6/10/22
AG
Most research would indicate that it's not nearly that high and of the investors that are actually buying up SFHs the majority are retail landlords (eg the people on this board who own 3-4 rent houses) not Blackrock and the like.

https://www.vox.com/22524829/wall-street-housing-market-blackrock-bubble
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ItsA&InotA&M
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1:58p, 6/10/22
Per today's DMN (via National Association of Realtors).
In North Texas institutional investors purchased 28% of residential properties in Texas. (in 2021)
In North Texas:
52% in Tarrant County
45% in Rockwall County
43% in Dallas County
39% in Denton County
34% in Collin County



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SteveBott
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2:16p, 6/10/22
AG
Here is the Realtor article. In 2021 13% of homes were purchased by institutions. Of those 4 of 10 were held and the rest flipped. The buying is concentrated in Texas though. One in four.

https://www.realtor.com/news/trends/where-are-big-investors-buying-the-most-homes/amp/
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Scientific
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4:23p, 6/10/22
AG
Is there any data going back 30 years tracking their market share? Whether they make up a majority of SFH purchases or not, I think it'd be interesting to see this trend. When I was buying a home 10 years ago, the big thing was foreign cash coming in looking for a place to park wealth. The demand side of the equation only got worst since.
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jagvocate
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In reply to 12thMan9 • 6:04p, 6/12/22
AG
12thMan9 said:
You're looking at tiktok for intelligent thoughts?
Classic ad hominem logical fallacy
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normaleagle05
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In reply to ItsA&InotA&M • 10:59p, 6/12/22
AG
ItsA&InotA&M said:
Per today's DMN (via National Association of Realtors).
In North Texas institutional investors purchased 28% of residential properties in Texas. (in 2021)
In North Texas:
52% in Tarrant County
45% in Rockwall County
43% in Dallas County
39% in Denton County
34% in Collin County

These numbers are internally inconsistent. You can't average a group of numbers and get a result below it's smallest value. Are we operating with two definitions of "in North Texas" in the same breath?

As somebody that pulls a ton of deeds and actually reads them I haven't seen the anecdotal evidence of the claimed trend. What I have seen is a lot of repeated stories claiming the same trend with goofy math and loosely defined terms. All with the seeming aim of creating a narrative, that were it true, would be hostile to a large group of voters. I'll be doing some batch review to see if it matches any of these claims.
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mwp02ag
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8:51a, 6/13/22
AG
Question:

If institutional money is seeking hard assets like homes, shouldn't you be doing the same thing with some of your money?

Seems like I see so many people who don't own anything more than a primary griping about it instead of thinking about how to do the same thing.
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dc509
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In reply to Less Evil Hank Scorpio • 10:16a, 6/16/22
AG
GarlandAg2012 said:
My friends have been talking about this more and more lately and one of them posted this today in our group chat:

https://www.tiktok.com/@glenndabaker/video/7106864711429377323?_t=8T3CDqsjlud&_r=1

People in the industry, do you agree that this is a growing issue for regular homebuyers? What are the pros and cons of some sort of regulation in this space? If its true that over 60% of houses under $500,000 are being bought by institutions that seems like a paradigm shift with the potential for unforseen consequences, but I'm not sure what to make of it, or if its really true.
No, not really. The issue is more lack of supply than anything, and not because PE groups are buying it all up. Builders are going as fast as they can, but still can't keep up. That plus the cost of dirt at the moment which contributes to the lack of supply and high housing prices.

There are areas in DFW that 100-200 aces was $20,000/ac two years ago, but today that same land is trading $80,000/ac.
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GoodAg84
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11:58a, 6/16/22
AG
I wonder how many of these being counted as "institutional" buyers are actually companies like Ribbon that turn mortgage contingent offers into cash offers for buyers....would look like an institution, but are not really. At Cross Country, we coordinate with Ribon using FastTrac approvals which fall into this category.
Gig Em!

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Red Pear Realty
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12:28p, 6/16/22
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AG
Do we think builders are going to build more homes, or less homes in the next 12-18 months, given interest rates, inflation, the economy, land prices, etc? Short term, we may have a real estate correction, but medium to long term, man, real estate is going to get really expensive.
Sponsor Message: We Split Commissions. Full Service Agents in Austin, Bryan-College Station, Dallas-Fort Worth, Houston and San Antonio. Red Pear Realty
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