The first-time homebuyer vs. Wall Street: Is the American dream slipping away?

News

NASHVILLE, Tenn. (WKRN) — In mid-April of this year, Governor Bill Lee signed a bill making it easier for corporate companies, or businesses to purchase homes and list them for long-term rent.

The practice itself has been going on since the financial downfall of 2008, but now, it’s back in the spotlight due to our dire need for housing inventory.

Some believe it’s ruining the chance for those in the lower, even middle-class to accumulate wealth, with many asking if the American dream of buying a home is slipping away?

“Corporations started buying suburban homes in Nashville and across the country in small numbers in the great recession, they were really profitable, and that idea really caught on with investors and entrepreneurs and that led us to where we are today,” said Steve Jolly, President-Elect of Greater Nashville Realtors.

Today as we know it consists of low inventory and high demand. Competition is fierce and even more so with corporate entities scooping up multiple homes in multiple locations.

Can you blame them? They’re looking for a way to invest.

“It’s getting a light shined on it now because you have deserving families that are not getting the opportunity to buy a home and they’re being told a corporation or investor or Reet or hedge fund or some sort was able to purchase the home because of more favorable terms,” said Jeff Checko, a realtor and broker with the Ashton Real Estate Group of RE/MAX Advantage.

Checko adds these few entities make up about 10 percent of the marketplace in Tennessee.

The problem, he says, is they’re paying well above asking price, outbidding the average buyer looking to purchase. The trend continues to drive up the price of single-family homes. As a result, more people rent.

“Real estate is the biggest creator of generational wealth in the United States,” Jolly said. “That’s why it’s so important for buyers to work with a realtor that can help them have success in this tough market.”

A market that seems to only get rougher, especially for first-time homebuyers.

“It’s only now it’s become a problem and you’d hope that there’s some compassion on the part of these entities to say, hey, there’s a lot of people being left out in the cold, but that’s not really the way business works, and capitalism works,” Checko said.

Checko admits it would be tough for a first-time homebuyer to compete with Wall Street. As always, cash is king and if you’re going up against another cash offer without a cash offer yourself, you’re walking up a slippery slope.

“Keeping contingencies limited and giving the seller favorable terms will put yourself in the best position,” Checko said. “I will also say from a philosophy or integrity standpoint there’s a lot of realtors that are saying, even in the listings, we’re not taking offers from corporations or hedge funds, we want to sell to a family.”

Checko reminds homebuyers to stay resilient and keep pushing on.

Copyright 2021 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Trending Stories

Don't Miss