How will banning large investors impact real estate prices

 

 

Last week I asked all of you how will prices be impacted by banning large investors?  The real estate pros have spoken and as you can see from the chart above, the majority (52%) think that there will be no impact on prices from the proposed ban of real estate investors.  How accurate are these predictions?

What did real estate pros say  about the impact of banning large investors?

I was pretty surprised that 26% believed that real estate prices would decline. On the flip side 74% believe that prices will either not be impacted or that prices will rise.  It will be interesting to see what happens in the next few years.

 

Key comments on banning large investors from buying real estate

Below are some of the key comments from the survey:

1. Supply and Demand. Mega Investors have been buying property which has created shortages and driven prices upward especially for first time home buyers. This has been occuring for years. By halting or stopping a market of home ownership through a private entity, then the supply is suddenly more available creating a bigger supply available for home Buyers. Interesting to see Rental market happening
2. The percentage of SFR home sales that are linked to the large institutional acquisition is too small to influence the supply/demand equation. It is the misdeeds of the institution can influence value, supply/demand. Such example is in Fort Collins where the activity was in a specific neighborhood. They bought high and sold low to where is did disrupt the market for a short period.
3. This is just political grandstanding in order to make it look like the administration is doing something to mitigate housing prices. Big evil corporations are always the boogieman.
4. I do not believe there are enough players or enough inventory purchased to have a real material dent on pricing and I don’t believe this variable is significant enough to impact the real problems attributable to bad monitary policy and bad local zoning/regulatory/code costs, not to mention other fees associated with ownership (insurance, taxes, etc.) This is too minor to even make a blip.

Key insights on banning investors from buying residential Real Estate

Thank you everyone for your participation and insights in my survey.  The insight in the comments from readers was amazing and I hope everyone gained a good perspective from your fellow readers.    My key takeaway from this survey is that banning large investors from residential real estate is unlikely to radically alter prices one way or another.    We will get to see how this all shakes out once we get the final legislation.  Thanks again and stay tuned for upcoming surveys 😊

 

Additional Reading/Resources:

1. https://www.fairviewlending.com/trump-bans-investors-pulls-floor-from-house-prices/
2. https://www.fairviewlending.com/where-should-you-invest-in-real-estate-in-2026/
3. https://www.fairviewlending.com/fed-drops-rates-why-did-mortgage-rates-barely-budge/
4. https://www.fairviewlending.com/phantom-debt-soars-what-does-this-mean-for-real-estate-2/
5. https://www.fairviewlending.com/never-buy-a-residential-condo/
6. https://www.fairviewlending.com/the-war-on-landlords/
7. https://www.fairviewlending.com/house-prices-hit-another-record-should-you-even-care/
8. https://www.fairviewlending.com/root-cause-of-real-estate-price-declines/
9. https://www.fairviewlending.com/will-real-estate-fall-to-2020-values/

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Glen Weinberg personally writes these weekly real estate blogs based on his real estate experience as a lender and property owner.  I’m not an armchair reporter/writer.  We are an actual private lender, lending our own money.  We service our own loans and own commercial and residential real estate throughout the country. 

My day job is and continues to be private real estate lending/ hard money lending which enables me to have a unique perspective on the market.  I don’t accept any paid sponsorships or ads on my blog to ensure accurate information. I’ve been writing this for almost 20 years and have over 30k subscribers. Please like and share my blogs on linkedin, twitter, facebook, and other social media and forward to your friends 😊.  I would greatly appreciate it.

Fairview is a hard money lender specializing in private money loans / non-bank real estate loans in Georgia, Colorado, and Florida.  We are recognized in the industry as the leader in hard money lending/ Private Lending with no upfront fees or any other games.  We fund our own loans and provide honest answers quickly.  Learn more about Hard Money Lending through our free Hard Money Guide.  To get started on a loan all we need is our simple one page application (no upfront fees or other games).

Written by Glen Weinberg, COO/ VP Fairview Commercial Lending.  Glen has been published as an expert in hard money lending, real estate valuation, financing, and various other real estate topics in Bloomberg, Businessweek ,the Colorado Real Estate Journal, National Association of Realtors Magazine,  The Real Deal real estate news, the CO Biz Magazine, The Denver Post, The Scotsman mortgage broker guide, Mortgage Professional America and various other national publications.

 

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