Investor activity peaked throughout the mid-pandemic homebuying boom, but as a housing correction slows home sales all across the U.S., home prices are falling and investors are holding back. While economists don’t anticipate a correction on par with the Great Financial Crisis of 2006, today’s housing slowdown is moving at a more rapid pace.
Home prices are already down 8.2% in San Francisco, and in the event of a major correction, investors are the first to retreat. According to Fortune, that waning demand could send prices even lower in the months ahead.
“As soon as demand weakened, we were marking properties down, and that drives prices down. Every other home for sale in a neighborhood where we marked the listing down now has a comparable sale that every buyer is going to know about and talk about,” [Glenn] Kelman says.
Of course, so-called investor mania during the Pandemic Housing Boom wasn’t one-size-fits-all. The investor frenzy was particularly fierce in Western boomtowns like Phoenix, Austin, and Las Vegas. That helps explain why those frothy housing markets are correcting so dramatically right now.
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