Landlord investors keeping market stable

March 25, 2013 11:30AM

House flippers and speculative buyers fed the housing frenzy before to the recession; investors today, though, are buying with the intention of holding on to their properties and renting them out, according to the Wall Street Journal.

And this buy-and-hold philosophy is helping stabilize prices, market analysts and executives told the Journal.

“Whether they knew it or not, investors helped set a floor. They warmed up the market, and it brought buyers back,” Lanny Baker, CEO of ZipRealty, said.

Right now, all-cash buyers — largely investors — account for nearly a third of home sales nationwide, according to the National Association of Realtors. And rentals are becoming more popular, with homeownership at 65 percent last year, falling from 69 percent in 2005.

“We’re clearly at the beginning of a rental boom,” Christopher Thornberg of Beacon Economics, said. “We all saw there had to be a shift towards renting single-family units that owners could no longer afford. Investors played a critical role in that transformation.” [WSJ] —Christopher Cameron