“Small groups of neighborhood volunteers are blocking companies from buying single-family homes, rewriting homeownership rulebooks to thwart investor purchases of suburban housing. “ Writes Will Parker and Nicole Friedman at the Wall Street Journal…(WSJ)
- Winning bids. Chase Berrier, an HOA president in Walkertown, NC, told the Journal “They’re coming in, and they’re basically bullying people out with cash offers,”
- “We Don’t Want.” Berrier said he plans to whip up support this summer for new restrictions on HOA rules. “We don’t want a bunch of rentals…We paid money for houses to have families that are going to be there for years.”
It’s important to note that most of the time these anti-investor activists claim their concern is rooted in helping families afford to buy homes. However, read anything in-depth and you find the true reason, money. Parker and Friedman write earlier in the piece “…these associations now believe that the rise in home purchases by rental investors has led to a decline in property maintenance and made their neighborhoods less desirable.” And Berrier himself told the Journal, ” said some of the homes in the subdivision owned by investors now look shabbier, and absentee owners are hard to contact to resolve problems.”
This has never been about other families, it is about their family. They are worried that too many rentals properties will make their neighborhood less desirable which will lower prices. Nobody wants to see their home lose value so their concern is rooted in a kind of human nature, aka greed. However, I wish they would be honest about their motivation. Like most overburdensome housing restrictions this is not about helping new families buy a home, it’s about helping current families get top dollar for theirs when they decide they want to move. What’s funny is that their argument doesn’t make much sense when you extrapolate it. If too many rentals will make a neighborhood less desirable investors will be cognizant of that and limit investments to avoid depreciation of their investment. If rentals don’t dissuade future buyers then their number one complaint is rendered untrue.
The reality is investors are piling money into real estate because homes are appreciating at a 20% clip. However, with rates well into the 5’s, signs of a slowdown are being to form. My guess is by the time the HOAs figure out their new rules most big-time investors will have moved on to new investment opportunities and all the HOA will have accomplished is making their neighborhood less attractive to future buyers.