Impact of Investors in Distressed Housing Markets

Marcus T. Allen (), Jessica Rutherford (), Ronald Rutherford () and Abdullah Yavas ()
Additional contact information
Marcus T. Allen: Florida Gulf Coast University
Jessica Rutherford: University of South Florida
Ronald Rutherford: University of South Florida

The Journal of Real Estate Finance and Economics, 2018, vol. 56, issue 4, No 5, 622-652

Abstract: Abstract We examine a recent trend in the market where investors purchase residential properties. We find that investors purchase at a discount of 9.5% compared to individuals purchasing in the same time period and geographic area. More specifically, we find that small investors purchase at a discount of 8.0%, medium investors purchase at a discount of 11.1%, large investors purchase at a discount of 13.6%, and institutional investors purchase at a discount of 7.7%. We also find that the presence of investor buyers in a market helps improve house values. A 10% increase in the percentage of houses purchased by investors in a census block leads to a 0.20% increase in house prices.

Keywords: Investors; Distressed markets; Housing prices; Externalities (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (16)

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DOI: 10.1007/s11146-017-9609-0

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