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If You Sell a House, the Buyer Might Be a Pension Fund

D.R. Horton sold an entire subdivision of single-family homes to online investor Fundrise LLC, as more yield-chasing investors buy homes to rent out or flip.

NEW YORK – A potent new force in the U.S. housing market has been the rise of big investors who aren’t just buying single homes but entire subdivisions.

D.R. Horton Inc.’s subdivision in Conroe, Texas, sold for $32 million to an online property-investing platform, Fundrise LLC, which manages more than $1 billion on behalf of about 150,000 individuals. The builder earned nearly double what it typically earns selling houses to the middle class.

From individuals with smartphones and a few thousand dollars to pensions and private-equity firms with billions, yield-chasing investors are snapping up single-family houses to rent out or flip. They’re also competing for houses with ordinary Americans, who are armed with the cheapest mortgage financing ever, and driving up home prices.

“That’s going to make U.S. housing permanently more expensive,” says John Burns Real Estate Consulting.

Investors’ slice of the Miami housing market grows – as it does in other boomtowns, such as Houston, Phoenix and Las Vegas – among properties priced below $300,000 and in decent school districts.

“Limited housing supply, low rates, a global reach for yield, and what we’re calling the institutionalization of real-estate investors has set the stage for another speculative investor-driven home price bubble,” the firm says.

Source: Wall Street Journal (04/04/21) Dezember, Ryan

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