Poster #62 - Institutional investors and properties values: The case of Atlanta

• In Event: Friday Poster Reception

Abstract

Institutional investors, such as private equity firms and real estate investment trusts, have become major players in the U.S. housing market, especially in the single-family rental sector. These firms often target cities with affordable housing and high rental demand, and Atlanta has been one of their most concentrated areas of activity. Since the foreclosure crisis, investors have acquired thousands of properties across the metro area, reshaping the dynamics of local housing markets. This paper examines the effect of institutional investor activity on residential property values, with a focus on identifying which investor characteristics are associated with local housing price appreciation. Using a panel of single-family homes in the Atlanta metropolitan area from 2010 to 2022, two complementary approaches are used to study the effect of investors. The first component of the analysis aggregates house-level data to a neighborhood-year level and estimates the effect of investor entry on average neighborhood housing prices using a two-way fixed effects specification. In addition to the primary causal design, we conduct a secondary non-causal analysis that explores spatial exposure to investor activity at the housing level using an event study. This approach examines how proximity to investor-owned homes, within 250, 500, and 1000 meters correlates with property price levels, holding housing and neighborhood characteristics constant.

With the neighborhood-level approach, we find strong evidence of upward price effects, particularly concentrated in the lower segment of the market. These estimates remain robust across a range of specifications and balance checks, supporting a causal interpretation. Although non-causal, these exposure-based models shed light on the broader neighborhood footprint of investor activity. We find that properties located near clusters of investor acquisitions, especially institutional players, exhibit systematically higher price levels than those without such proximity. Notably, the effects are not homogeneous across investors. The analyses show that the intensity of price effects is correlated with investor characteristics such as size (measured by portfolio volume), acquisition strategy (e.g., foreclosure targeting), and temporal entry (early post-crisis acquirers show higher impact). Our findings suggest that price hikes are not merely a function of investor presence, but of the scale, aggressiveness, and network behavior of these firms. This provides new insight into how financialized ownership reshapes urban housing markets beyond individual property boundaries.

The findings contribute to the growing literature on financialization in housing markets by disentangling the localized effects of investor activity. While much of the public and policy discourse has focused on aggregate investor presence, our results demonstrate that both who the investor is and where they operate matter greatly. These insights offer implications for policymakers concerned with housing affordability, displacement, and neighborhood stability in the wake of institutional investment. By combining a causal identification strategy with spatial exposure diagnostics, this paper highlights the multifaceted role that investors play in shaping residential property markets. Future work should explore how these price effects translate to rental dynamics, demographic shifts, and long-term wealth accumulation in affected communities.

Author

• Jomayra Patricia Mones, Georgia State University
  Presenting Author