I don't think there is any evidence that large firms are causing anything in the market. They're simply not a big enough player. Your own chart shows that the Blackstone type firms all combined only purchased 0.3% of homes.
I was wondering this as well. The linked source, "No, Wall Street investors haven't bought 44% of homes this year," on Yahoo Finance seems to contradict the point that Dr. Al Bahrani is trying to make in his article. Maybe there has been an increase in institutional investors since 2000, but there is no causal data presented to demonstrate an effect on housing prices.
I appreciate you both reading my post and commenting. I think the request for causal evidence is understandable, I also think it might be early to be able to tease out that effect. Economists will be examining market concentration and housing prices for a while. For now, I will settle for correlation and reporting on trends. I remember in 2005 when we had concerns about increased use of ARMs and No Income and No Asset loans, it was dismissed too. I hope that we can invest in learning more about market dynamics and examine different ideas. Speculation in housing markets (investors) increase volatility of the asset class. "Absence of evidence is not evidence of absence".
I agree the effect may not be as pronounced but it definitely contributes to the overall housing market. Especially seeing many of these firms buy in popular growing areas with a lot of job growth
I don't think there is any evidence that large firms are causing anything in the market. They're simply not a big enough player. Your own chart shows that the Blackstone type firms all combined only purchased 0.3% of homes.
I was wondering this as well. The linked source, "No, Wall Street investors haven't bought 44% of homes this year," on Yahoo Finance seems to contradict the point that Dr. Al Bahrani is trying to make in his article. Maybe there has been an increase in institutional investors since 2000, but there is no causal data presented to demonstrate an effect on housing prices.
I appreciate you both reading my post and commenting. I think the request for causal evidence is understandable, I also think it might be early to be able to tease out that effect. Economists will be examining market concentration and housing prices for a while. For now, I will settle for correlation and reporting on trends. I remember in 2005 when we had concerns about increased use of ARMs and No Income and No Asset loans, it was dismissed too. I hope that we can invest in learning more about market dynamics and examine different ideas. Speculation in housing markets (investors) increase volatility of the asset class. "Absence of evidence is not evidence of absence".
I agree the effect may not be as pronounced but it definitely contributes to the overall housing market. Especially seeing many of these firms buy in popular growing areas with a lot of job growth