Flickr user Charleston's TheDigitel (CC)
Last month, the Wall Street Journal published an article—“Racing to Buy Homes Sight Unseen”—about how more and more investors are using technology to evaluate and purchase homes without seeing them. They’ll often buy swaths of homes at once and then rent them out. The article notes how in Atlanta, realtors are finding that these rapid-fire, bulk purchasers make it difficult for individual home buyers to compete for housing opportunities.
Investors are now making purchases in seven minutes.
Now seven or eight years out of the foreclosure crisis, more and more individuals burned by the foreclosure crisis will be able to repair their credit and qualify for homeownership. But as demand increases, despite what one would imagine about the excess of housing after the foreclosure crisis, supply is increasingly in short…well, supply. Investors are purchasing so many houses that residents are having trouble buying them.
As an advocate for a balanced regional housing stock that provides a range of rental and homeownership options at a range of incomes, I tend to argue that quality single-family rental investors can be a huge value to communities when the alternative is a vacant home. Vacant properties result in blight, added expenses to local fire and police budgets and reduced quality of life.
That said, the desire for homeownership is understandable given the civic, community and social stability homeowners bring to their neighborhoods. For many municipal officials across the Chicago region, particularly those battling some combination of blight, vacancy, zombie properties and disinvestment, there is a growing aversion to this new housing stock. Local residents will never be able to compete with the purchases that these investors are now making in seven minutes.
The national housing market recovery will mean that homeownership could return to many communities across the U.S. and the Chicago region. With more individuals and families in the market for a house, this investor landlord trend is a serious issue for the future of our communities. From housing counseling groups to realtors to advocates, we need to come together and design policy solutions that continue to support our residents without demonizing responsible investors and new investment in communities. The housing market balance is off again and we need to catch it before another housing bubble brews…and then bursts.