Last week, the Washington Post ran a news story detailing how investors bought a record share of homes in 2021. Great news, right? Correct. But, not for everyone.
The story actually leads into a reason why Parcl was founded: To provide Real Estate investing to everyone. And that lack of accessibility is exactly what this data shows.
The fact investors are buying up residential property illuminates the fact that the US property market is in a great place.
But, what impact does this have on the average person? An individual who can't gain exposure to the Real Estate market due to the shortage of residential properties or the financial barriers to entry.
Let's take a look at what this news story is actually saying, how it could impact you, and our tips on a workaround.
After an analysis of 40 major metro areas, data has emerged that investors bought up a record share of residential properties, with Black neighborhoods and southern cities being disproportionately affected.
The data shows that in 2021, 30% of home sales in proportionally black neighborhoods were by investors, meaning institutions, wealthy individuals, or local companies.
Senator Sherrod Brown had this to say about it: "One of the reasons housing prices have gotten so out of control is that corporate America sensed an opportunity."
"They bought up properties, they raised rents, they cut services, they priced out family home buyers, and they forced renters out of their homes." He added.
So, the summary is that investors are pricing out the average citizen from owning Real Estate or investing in local residential properties.
Well, we actually covered this in detail in our article How Institutions Buying Real Estate Will Affect You; check it out.
But, to summarize our answer to this question:
Real Estate is a non-correlated asset, and subsequently rented properties can generate strong and steady cash flows. These two attributes have made real Estate among the most consistent investments and attractive inflation hedges of any asset class (inflation is at 39-year highs).
This means a few things for different people. It means unaffordable rent prices for underserved and minority communities as investors attempt to make a faster profit.
It also means they'll have less chance of gaining exposure to a $300T market. An investment in a home is typically an individual's largest asset, an asset that is quickly becoming harder to obtain due to financial barriers.
The housing supply is already constrained nationwide, and by buying up residential properties and increasing prices, it's harder for beginner investors to find properties to profit from. Not to mention those who need them the most as a way to house their family.
Have you ever wanted to invest in Real Estate? If your answer is yes, then great, welcome to the club. But if you haven't already done so, ask yourself why that is.
typically there are a few reasons:
1) You've got some savings, but it's not enough for a downpayment.
2) You think traditional real Estate investing takes too long to understand
3) You can't find properties that are attractive enough as an investment
4) You've not got the time to renovate homes, collect rent or manage tenants
And if they aren't a concern, this method could still benefit you.
We believe that Parcl is the way forward to combat the issues the above data has shown. Suppose you come from a disadvantaged background or area. In that case, research shows that you typically will have a significantly lower chance of being able to invest in property due to the high financial barrier.
Parcl gives you the ability to invest in Real Estate without owning physical property or dealing with illiquidity and burdensome capital commitments. With Parcl, you will have the same access, cost, and low capital commitment as the largest investors in the world. Consider the playing field leveled.
So, basically, we give people the power to invest for a fraction of the cost in neighborhoods they live and work in. Or, neighborhoods across the US without ever needing to visit, all you need is a laptop and the power of the internet to invest.
Also, there are no long and tedious processes like traditional Real Estate investing, in and out, in just a few clicks.
Over the coming months, Parcl will be building out its real-time data technology, and we'll be able to provide this information on a live basis. We're excited for what the future holds; we'll be able to provide the world with the most valuable real-time property data.
Along with some insightful, real-time data, Parcl will give everyone an easier and cheaper way to invest in Real Estate; we'd love to have you join our mission by following our socials below.
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