[1] https://www.wsj.com/articles/blackstone-bets-6-billion-on-bu...
It’s a bit of a different story if you’re just buying the property on the expectation that its value will go up better than other assets. There are reasons to expect that might happen (old people typically own more property and vote more than young people and they tend to care a lot about the value of their property going down so governments often have policies to try to ‘help people buy homes’ which allow people to afford higher prices which helps to keep the prices high) but it does seem that something has to give eventually (and eg it seems like there has been a bit of a change in Californian housing policy recently).
Generally I would expect an institutional investor to be more sensitive to things like interest rates and price when making purchasing decisions than a potential owner-occupier who has to live somewhere and may be more sentimental about certain things investors don’t care about.
Investment firms keep liquid cash precisely for this reason, just in case a fire sale pops up and they can move quickly.