By Sarah Edelman
Across the country, investors are taking advantage of the nation’s foreclosure crisis to purchase homes at bargain prices, often beating out potential homeowners who remain sidelined. In July, cash-on-hand investors bought about 55 percent of the homes sold in Las Vegas and numerous properties in other major metropolitan areas such as Miami, Phoenix, and Prince George’s County, Maryland, a suburb of Washington, D.C.
Investors can play a key role in a housing recovery. By absorbing excess inventory, they establish a floor for home prices and jumpstart appreciation. Responsible investors can also offer quality, affordable rental opportunities to families who may be locked out of homeownership due to foreclosure or lost wealth from the recession.
But while they can support communities, irresponsible investors can also destroy them by allowing properties to sit empty, declining to bring rental properties up to code, and neglecting tenants’ needs in instances where the home is occupied. Additionally, investors that buy large quantities of properties in a single area can cause prices to overheat and increase market volatility. Conversely, if institutional investors following a set business plan sell numerous properties in the same time frame, prices in those neighborhoods could decline again.
Given investors’ powerful impact on the housing market, it’s important that policymakers monitor investor activities to limit their possible negative impacts. As the nation faces a new, larger, wealthier, and more sophisticated generation of investors, the need for oversight has never been greater.
Copyright© 2016 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.
Content on this website is copyrighted and may not be redistributed without express written permission from RISMedia. Access to RISMedia archives and thousands of articles like this, as well as consumer real estate videos, are available through RISMedia's REsource Licensed Content Solutions. Offering the industry’s most comprehensive and affordable content packages. Click here to learn more! http://resource.rismedia.com