According to a report released by Realtor.com on July 30, 2021, investors are causing a home inventory shortage in 62% of the nation’s largest metropolitans; scooping up homes that appear to be good deals in the hopes of flipping them for a profit as record-low inventories push the median price of homes higher. While this may look like market manipulation, it does not rise to that level.
In a nutshell, these ultra-wealthy investors are capable of moving the market vis-à-vis supply. This isn’t always for the worst, as investors are actually increasing inventory in markets where they are dumping off properties; this is happening in 38% of the nation’s largest markets. The markets that are benefiting from this tactic the most appears to be Atlanta, Georgia and Dallas, Texas, and Los Angeles, California.
Given the recent news that the rate of appreciation for homes are dwindling in certain markets, it makes sense that investors are reevaluating which investment properties are worth holding onto for an extended period. All indicators suggest that Los Angeles, California is reaching the maximum value the market will bear, and prudent investors have been selling their properties to reap the benefits of an inflated market.
At the Chernov Team we understand knowledge is power, and knowledge of how the ultra-wealthy perceive their home investments in inflated markets is powerful knowledge indeed. At the Chernov Team we know that whoever comes to the table most prepared leaves with the most, and the Chernov Team always leaves the table with the most.