The Rise of Institutional Investment in the Residential Real Esta

[Garrigues Wier]

Saw this on Reddit, and seems appropriate to share here. SFR portfolio transactions by institutional investors are a great thing to look out for in your markets (especially in distressed neighborhoods). I will post the abstract below! (the full research paper can be found HERE)

This paper examines the recent explosive growth of institutional investment in the single-family-residential markets and its impact on local home prices. Using a quasi-natural experiment in which investors purchased pre-packaged home portfolios, we find that average properties located within 0.25 miles of bulk-sold properties sell for $3,323.25 higher than homes located farther away. The spillover effect is greater for foreclosed homes ($8,494.52), homes with similar size as bulk-sold properties ($3,665.07), and homes in highly distressed neighborhoods ($25,047.81). Our results suggest that while institutional investors conceivably pursue opportunities in distressed real-estate markets, they also provide valuable liquidity which helps recover neighborhood home values.