The vast majority of home purchases aren't from speculators or institutional investors.
Institutional investors only own about 0.5% of homes. If they're forced to stop buying, nothing will really change in a noticeable way. At best, small landlords and investors will scoop attractive properties up for slightly less.
Is that 0.5% a uniform distribution across the United States or is it concentrated in a handful of hot markets? I suspect the latter and have to imagine some distortion must be occurring in those regions.
Maybe the best part of this legislation will be that people will realize it's not institutional investors that are driving up home prices. No, that's far too optimistic.
Home affordability is getting better anyways, which is great, because we are finally having a surge in new & denser home building in popular regions and there mortgage rates are more reasonable than they were in the COVID-era.
> Institutional investors only own about 0.5% of homes
Where they buy those homes matters though. In areas with lots of jobs/growth (often the areas experiencing the most housing price pain), that number is likely much higher.
Nonsense. Do you think these landlords intentionally overpaid for the properties? They are sophisticated entities who like to pay at or below fair value.
I'm not sure if they could be forced to sell those, the government could, but then that would fall under just compensation seizure. I'm not a lawyer, but it would seem under basic legal theory that you couldn't take those homes.
Not that I expect this particular strategy from this administration, but there's 'forced' as in "you WILL sell this property", and there's 'forced' as in "any corporate owned housing unit will see its property tax rate increase by 25% per year until it is sold to a person". I don't think your description could apply to the latter.
IF it results in dramatic reduction of home prices, this sounds great at first, but in actuality, it throws the market into disarray, since many sellers and also buyers, and it may trap home owners who need to sell into bankruptcy.
God forbid someone not sell out of their home. /s Home ownership isn't exactly a crappy life milestone to be stuck at. Yeah it would suck for a select few people who need to get out of one and into another RFN due to life reasons and surely some municipalities would leverage that to really screw people but I think the upside is orders of magnitude higher than the downside.
Come to think of it, I bet making homes less liquid would knock the divorce rate down more than anyone wants to believe it would, lol
These homes going back on the market wouldn't make a dent in housing prices. As much as we'd like to think that corporations are to blame, that's not reality. Plenty of middle class families own homes and vote for local politicians to keep their investment safe (and for it to increase in value) by making it hard to build.