4 ms·
How do we know that institutional buyers won't step in and take advantage of the price dip, minimizing the overall decline? Imagine a quarter of falling prices,
by 88913527 5y ago
How do we know that institutional buyers won't step in and take advantage of the price dip, minimizing the overall decline? Imagine a quarter of falling prices, then the big money comes in to make purchases, easing the blow to prices. It's hard to know how much cash is sitting on the sidelines but it's certainly a possibility given the proportional increase in institutional purchases.
- gfodor 5y agoYep. Interest rates don't mean jack if there's a bottomless market of buyers who will not use debt and just want to put capital somewhere, anywhere, that will appreciate in a highly inflationary environment. It will be tragic that average people won't be buying homes, but the notion that consumer home purchases have the power to move market prices much seems like a weaker and weaker assumption.
- woeirua 5y ago1 - The most recent estimates that I've seen suggest that institutional buyers are still a small portion of the market overall. I have seen no evidence, anywhere, to suggest that institutional players alone could keep home prices growing at this rate. 2 - As interest rates rise bonds and other investments become significantly more lucrative and will draw money out of real estate, as real estate is significantly less liquid than most other investments.