Investors bought 20% of properties in Greater Boston from 2004-2018, report shows

BOSTON – Owning a home in Boston is a reality to some people, but to others it is a seemingly unreachable goal. According to new research, there is an emerging obstacle preventing some people from becoming a homeowner.

“The big headline is that one in five properties in Greater Boston has been sold to an investor in the period between 2004 and 2018,” said Jessie Partridge Guerrero, Interim Director of Data Service with The Metropolitan Area Planning Council (MAPC).

In their report, MAPC defines an investor as an LLC, someone who purchased three or more properties in five years, or someone who bought a building with four or more units. Their research shows the investors are more likely to pay with cash, purchase the home at a discount, or flip it for profit.

“The rate of investor activity is highest in lower income communities of color. They are able to scoop up any naturally occurring affordable housing with cash, which is often more attractive to sellers,” said Partridge Guerrero. “Some tenants have experienced that when investors come and buy property from a previous owner, they are often either outright served notices to quit, or to clear the building, or they raise rents by rates so high that folks are unable to stay.”

She says often investors are targeting high density urban areas with lower priced homes. When investors come with cash, sometimes they are getting deals $100,000 less than someone looking to buy with a mortgage.

“This is a problem for low to moderate, or first-time homebuyers, who are looking to compete even for these lower priced properties,” said Partridge Guerrero.

On November 30, MAPC will present their research in a webinar. They are suggesting ways to discourage speculation buying from investors, or to find ways to generate revenue from it. The profits would go toward creating more affordable housing.