Investors snatch up real estate in King, Pierce and Snohomish leaving first-time homebuyers behind
Jul 26, 2022, 11:58 AM | Updated: 1:03 pm
Private investment groups bought up nearly 10% of King County’s residential homes listed on the market in 2021, so what does that mean for local families looking to purchase their first home?
Real estate investment firms buy up nearly 10% of King County’s residential homes in 2021
Looking at the raw numbers, Washington state documented 107,354 property transactions in 2021, according to the Northwest Multiple Listing Service which records real estate sales in 26 counties across the state.
That means 10,300 Washington state properties effectively were sold to private investment firms, homes that could otherwise be sold to first-time home buyers.
“It’s pushing people out of the market making homes more or less unaffordable. It’s a problem,” Chris Davies, host of Street Talk Financial, told KTTH’s Jason Rantz.
As the year-over-year inflation rate approaches 10% — an increase that the U.S. has not seen since the 1980s — and as federal interest rates remain relatively low, private equity groups look to buy up real estate to hedge against those market pressures. Rental fees associated with those properties can be increased annually, allowing those investment firms to keep pace with the inflation rate.
“One of the best hedges against inflation is to buy real estate … over the past year, year and a half, you’re looking at 20 to 30% rent price increases across the board, depending on the metro area … The goal is obviously to invest in this and make it profitable. And as a result, rents go up. So again, the people on the lower end are getting priced out.”
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