Why Mom-and-Pop Investors Are Suddenly Snapping Up These Surprising Markets—And What It Means for You
The advantage smaller investment firms feel they have over larger ones is less internal regulation and red tape, the Journal reports. They don’t have to report to outside shareholders or pension funds. Another advantage is that there is currently less competition, as conventional homebuyers are not active in the market, waiting for more favorable conditions. Additionally, mom-and-pop landlords or investment firms can make all-cash offers, avoiding the issue of high interest rates.
38% of National Homebuilders Lowered Their Prices in July
The Journal reports that the cozy relationship that formerly existed between homebuilders and national single-family residential companies, such as Invitation Homes, recently stalled due to the inventory pileup in Florida and Texas. In the rush to clear their books of the supply glut, this has allowed smaller investors the opportunity to buy homes at deep discounts. National homebuilders have issued what amounts to a fire sale, with 38% lowering their prices in July, numbers not seen since just after the pandemic, according to the NAHB/Wells Fargo Housing Market Index (HMI).
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