Does it matter who is purchasing the inventory?

Here’s an interesting take from Business Insider on hedge funds purchasing the low-end housing stock in Reno and Las Vegas: The 1 Percent Is Buying Up All Of The Low End Real Estate

Will institutional investors making bulk housing purchases be good or bad for the local real estate market? What are your thoughts?


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8 Responses to Does it matter who is purchasing the inventory?

  1. Avatar Dave Taccogna says:

    Institutional investors, I think tend to sell into hot markets so as long as they are getting good return on the rentals then what reason do they have to sell. I think it would take another extreme move up in housing prices driven by loads of maniac buyers who purchase at any price in order for big investors to sell on a large scale.
    Europe could blow the stock market up at any time and so cheap real estate is the way to get good stable return for the foreseable future for many hedge funds.

  2. Avatar Jay says:

    I don’t see the profit margin on hedge funds selling low end housing, to the renters. Now in Reno, if they want to buy “blocks” of low-end housing, residential and commercial, rezone it if needed, tear it down, and start over, I am all for it.

  3. Avatar tyler durden says:

    with ZIRP, negative real rates on bonds, awful growth outlook and rigghtful fear of stock market……money is seeking a return and crashed real estate seems a logical home

  4. Avatar Rory says:

    Jay is onto something.

    To the well-healed investors: Please buy up entire dilapidated blocks for infill dev.

  5. Avatar Astute says:

    I predict that the impact of the hedge funds buying low end properties in Reno will be drive prices up. It may, however, actually drive prices down. Unless, of course, it has no effect on prices at all.
    I believe that I now qualify as “an economist” as in “economists predict this will happen, unless they don’t.”

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  7. Avatar GreeenNV says:

    I just don’t see the hedge funds active here in Reno. This YTD spreadsheet is sorted for SFRs, Townhouses and Condos, then by the new owner’s name. If you scroll down, you will see “clumps” when someone like a fund is buying a lot of properties. It just isn’t happening here, at least not yet.

  8. Avatar GreeenNV says:

    Rory, I like the idea of buying up blocks for infill development in concept, but infill just doesn’t pencil even if the land is “free”. City / County / TMWA fees to entitle a lot can easily top $35,000 before you even look at hard and soft construction costs. My current favorite is the Traffic Impact Fee ($5000 +/-) being charged in the approved Transit Corridors like South Virginia Street. This road fee is the same in Midtown as it is in Sierra Canyon or Stead – go figure. Over $7000 to connect to the City/County sewer system per unit, even though the lots are zoned for the increased density.

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