Is ‘Smart Money’ Pointing to Real Estate’s Future?

low angle photo of city high rise buildings during daytime

With U.S. home prices at record levels, it’s reasonable to speculate about the future of real estate—particularly whether it’s such a good idea to buy right now. Most everyone recalls the last time real estate prices set records—and the drop-off that followed.

Once the U.S. market hit bottom, even though history teaches that it was an ideal time to buy, most regular consumers didn’t even want to think about anything connected with real estate. That, of course, was when the big corporate players (aka, the ‘smart money’) moved in to buy up distressed residential properties by the thousands. It’s a familiar story.

The future of real estate prices is always a mystery, but lately there have been more than a few signs that should quiet some nerves. Some of the ‘smart money’ seems to be ‘talking’…

  • Smart money moves. For those who track the largest corporate players—the ones with access to the best information and expertise—the signs are clear. Recently, the Blackstone Group agreed to buy HPA, a hefty enterprise that owns and rents 17,000 single-family residences. Blackstone had quit that market in 2019—but just two years later tiptoed back in with a $240 million investment. Last week’s decision “shows that the investment firm is turning even more bullish on U.S. housing,” according to the Wall Street Journal. That’s an understatement: Blackstone’s HPA acquisition cost $6 billion!
  • Join the Club. An expanding roster of Wall Street powerhouses has duplicated Blackstone’s decision. Reuters cited one key motivating factor: “continued demand for bigger homes from people working remotely….”
  • Long-term, why worry? Perhaps the most supportive fact is the one that’s been true for millennia: real estate has perennially been regarded as the epitome of substantial long-term investments. For homebuyers who have no intention of selling in the near- or middle-term (or ever), the ups and downs of transitory valuations can be simply ignored. For the majority of homeowners who continued blissfully untouched by the century’s first two tumultuous decades, their investment has again proved safe and sound. And should they eventually choose to sell at a profit, the tax benefits are unparalleled.

Today’s home values are sustained by strong demand aided by low home loan interest rates. Call an agent to discuss the attractive offerings that are out there right now!