Institutional investors rushing to buy properties are not the main reason for the super-hot US housing market, according to CEO Coldwell Banker. Ryan Gorman told CNBC on Tuesday.
In an interview on “Exchange,” the head of the real estate department acknowledged that institutional buyers can increase pressure on prices, for example, in the search for potential inflation defenses.
“Today, however, this is a very, very small percentage of the total market,” said Gorman, whose company Coldwell Banker is part of Realogy Holdings Corp… “Yes, cash offers are very high, but the vast majority of cash offers – even in multi-offer situations – come from people who want to occupy and own a home just like anyone else.”
Gorman said he expects institutional investors to continue to attract residential real estate, including both multi-family and multi-family buildings. rent for one family…
“In terms of impact on the market as a whole, we are talking about percentage points – at the moment these are low single digits, and in some markets the trend is slightly higher,” said Gorman. It is “something to look at, but not as much as it might seem.”
The housing market was one of the strongest sectors of the US economy during the pandemic, fueled by a number of factors, including affordable funding, a desire for more space, and increased geographic flexibility thanks to remote work.
This influx of demand, coupled with a shortage of homes for sale, has driven prices soaring. In April, house prices rose to annual growth rate of 14.6%, which the up from 13.3% in the previous monthaccording to the S&P CoreLogic Case-Shiller National Home Price Index.
Some people are worried that the housing market is getting too hot, potentially creating another bubble as prices move higher and higher.
Gorman said the US just needs more homes to hit the market because the fundamental factors affecting potential buyers are likely to remain.
“Additional inventory is the solution to everything that worries us at the moment,” said Gorman.
According to him, the construction of new houses “is far behind what we need.” “Despite the high confidence of builders, the gap will continue. We are missing 4 [million] the 6 million homes we need today. “