Wall Street, Main Street, Your Street: How Investors Impact the Single-Family Housing Market

Abstract

We examine the entrance of institutional investors in the single-family housing market before and after the 2007-2009 recession. We empirically test whether the entrance of institutional investors contributed to the subsequent increase in home prices after the recession. Using just under 337,000 home sale transactions for the Charlotte region between the years 2005-2017, we find that institutional investors paid a discount of about 8.13%-11.19% per transaction. Additionally, we find that an increase in institutional investor home purchases in the single-family housing market had a positive statistical impact on individual home prices but only a moderate economic impact.

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Sean Brunson
PhD Candidate Finance

My research interests include real estate, home prices, and mortgages.