In recent discussions surrounding the New York housing market, Governor Kathy Hochul’s claims about investors aggressively purchasing homes seem to be contradicted by data. Statistics from Realtor.com indicate a significant decline in cash sales to investors, falling to the lowest level since 2008.
While Hochul asserted that investment firms were monopolizing the one- and two-family housing markets, the reality paints a different picture. Last year, large investors—those purchasing 50 or more homes—made up only about 3 percent of total sales and reduced their acquisitions by 8.7 percent compared to 2023. Rather, small-scale investors, defined as those buying 10 or fewer homes, dominated the market, accounting for nearly three times as many purchases (361,900) as large investors (132,500). This marks a peak for small investors, claiming 59.2 percent of investor home purchases in the past year.
Contrary to claims that these investors are driving up housing prices and limiting homeownership, the Realtor.com report reveals that investors were more active in selling homes last year than buying. With investors representing 10.8 percent of home sales, this was their highest share ever, challenging the narrative that they are cornering the market.
In places like Buffalo, where Hochul resides, investment purchases were only 8.9 percent, below the national average. The narrative seems to misrepresent the role of investors, as most of their cash purchases were related to traditional buyers responding to higher interest rates. Notably, cash offers are generally around 70 percent of market value, showing they are not outbidding standard buyers.
In response to these concerns, the New York legislature has imposed a 90-day waiting period for large investors on one- and two-family homes to provide individual buyers the opportunity to purchase before investors can make cash offers. However, this move potentially complicates sales for sellers needing quick transactions.
As the real estate landscape shifts amidst changing interest rates and economic conditions, it is crucial to rely on factual trends rather than political rhetoric. Both buyers and sellers can find opportunities in the current market, and small investors may continue to play a vital role in revitalizing properties across New York.