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If you sell a house these days, the buyer might be a pension fund

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Re: If you sell a house these days, the buyer might be a pension fund

#101

Post by dragonwriter »

CoastalCoder wrote: post #67
nickthemagicman wrote: post #34

Earlier quoted context omitted.

The government has a claim to your property. The government is strongly influenced by lobbyists. The government is also gerrymandered. The government always needs more money. Why would your property taxes not continue to go up endlessly?

> Why would your property taxes not continue to go up endlessly? IIUC, you're arguing that we should expect that ^^^ outcome, because of the political/economic dynamics you mentioned earlier. My understanding is that, except in towns/cities undergoing gentrification, U.S. municipal property taxes are pretty constant (modulo inflation). So it sounds like the outcome predicted by that theory probably isn't happening. W…

> My understanding is that, except in towns/cities undergoing gentrification, U.S. municipal property taxes are pretty constant (modulo inflation).

Yes, except for places experiencing increasing real property values, real property taxes aren’t increasing.

But the discussion was about places with sustained real property value increase, so that generality is irrelevant.

The scare scenario is still wrong, but for different reasons.

Re: If you sell a house these days, the buyer might be a pension fund

#102

Post by yabones »

Things went off the rails at the end...

> Well, the banks are controlled by and in bed with the same cabal buying everything up. You think this will be corrected by market forces when it is a financial and political pincher movement pushed by the same cabal that stole the 2020 election & hid COVID Truth? You are fucked.

https://twitter.com/APhilosophae/status/1402449561864577024

IMO, weakens the entire 'thread' and makes it much less trustworthy, even though I do believe this about institutional real estate investors. 'Feudalism' might be a bit extreme, but this will definitely impact the middle class in a very real way.

Re: If you sell a house these days, the buyer might be a pension fund

#103

Post by xapata »

wffurr wrote: post #100
xapata wrote: post #90

> Home equity is the main financial element that middle class families use to build wealth, and black rock, a federal reserve funded financial institution is buying up all the houses to make sure that young families can’t build wealth. Faulty logic. First, though historically people have used home equity to build wealth, that hasn't been the best method of building wealth. Most of those people would have been better…

>> Most of those people would have been better off continuing to rent and investing in the stock market instead. It's hard or impossible for individuals to get 5 to 1 leverage at low interest rates for investing in stocks.

But the only reason you'd want 5-to-1 leverage on a house would be to have a hope of keeping up with stocks. Also, it'd be 4:1, right, if you're doing 20% down?

Home values are believed to be less risky. Accordingly, they appreciate more slowly. To make them a good investment, you take leverage until they approximate the risk/return ratio you desire.

Remember, there are huge buyers like BlackRock out there that make the market efficient. If home prices drop to the extent that investing in a house is better than the stock market, then the investors swoop in and the prices go up until the two asset types are equivalent (including the fact that one generally borrows to buy a house).

Re: If you sell a house these days, the buyer might be a pension fund

#104

Post by Spooky23 »

artificialLimbs wrote: post #38
commandlinefan wrote: post #4

This hurts people who already own houses, too - property taxes are assessed on the appraised value of the home, which is a function of what the similarly-sized houses in your area sold for most recently. My property taxes have increased 10% every year for the past several years (and it would have been more if not for a legislative 10% annual cap). I worry that there will come a day when I've paid off my mortgage but…

Arkansas has a petition going around right now to axe property taxes completely. I believe other states do not have property taxes already as well.

It's a popular notion for the redneck crowd.

It never happens because it the math just doesn't work out. State/local revenues boil down to: property taxes, sales/use taxes, excise taxes, fees and income taxes. The big revenue streams are property taxes (schools, towns), sales taxes (county/state), and income taxes (state). Fees mostly sustain individual programs and have limited revenue potential - you can't make a fishing license $1000.

So when you get rid of property taxes, you get rid of local control of the levy, which sounds great until Little Rock doesn't want to provide state funds to pay your football coach $200k. Even in a middle of the road state like Arkansas, the pressure to meet Medicaid and other other state program dependencies would make it difficult to fund local government. You'll have a revolt if try to levy a 20% sales tax.

The talk radio answer is "shrink the government!". That means layoff cops, firemen, close schools and libraries, eliminate school sports and close public resources like parks, libraries and suspend things like street lighting. That will make reactionaries happy, but employers will leave.

Re: If you sell a house these days, the buyer might be a pension fund

#105

Post by dragonwriter »

dv_dt wrote: post #33
commandlinefan wrote: post #4

This hurts people who already own houses, too - property taxes are assessed on the appraised value of the home, which is a function of what the similarly-sized houses in your area sold for most recently. My property taxes have increased 10% every year for the past several years (and it would have been more if not for a legislative 10% annual cap). I worry that there will come a day when I've paid off my mortgage but…

This is why CA has prop 13 which limits increases to property taxes from year to year specifically because CA had seem property boom/bust cycles kicking people out of homes because of irrational real estate prices.

Well, no, California has Prop 13, because wealthy investors in property used constructed images of that scenario to build support for a law to transfer more wealth to the already wealthy, not because its was a real problem (and, even if it was, Prop 13 doesn’t focus on dealing with that problem.)

Re: If you sell a house these days, the buyer might be a pension fund

#106

Post by rkangel »

randomfool wrote: post #49
coverband wrote: post #5

This doesn't make a lot of sense to me. Why would an entity trying to maximize profits pay an extra 20-50% to purchase an illiquid asset?

Since land is a limited asset they can effectively corner the market in specific regions and gain pricing power, allowing them to turn that 20% purchase price premium into a hefty profit. Cities can counter this by allowing more new construction but backfilling Single Family Residences requires land and that may not be readily available within certain commute distances.

It's slightly more complicated than that because what they'll do is keep the properties and rent them. There being few houses to buy increases the demand for rent, and cornering the rental market means you can control rent prices.

Re: If you sell a house these days, the buyer might be a pension fund

#107

Post by gfodor »

nathan11 wrote: post #29

Probably worth pointing out this twitter account is promoting the idea that the 2020 election was stolen. To me that casts suspicion on their other assertions.

I follow this account and others like it because it allows one to be exposed to things like the idea that COVID leaked from a lab a year ago.

Skepticism is warranted in all cases, of course, but I think it's extremely healthy to keep in tune with a variety of subcommunities who are in and of themselves skeptics of many mainstream narratives.

Re: If you sell a house these days, the buyer might be a pension fund

#108

Post by jeffbee »

alert0 wrote: post #50
jeffbee wrote: post #20

If you want to fuck with landlords all you have to do is repeal your local zoning codes. Institutional money is pouring in because American cities have erected ridiculous barriers to entry in the housing market, making appreciation of home prices state policy. Repeal those barriers and make landlords poor again.

That actually messes with single family home owners more. I would love to provide more housing and make more money.

I don't care. Landlords aren't "providing housing" they are just money conduits. It is demonstrably the labor of their tenants which provides the housing, and the pendulum needs to swing back in the tenants' favor for a while.

Re: If you sell a house these days, the buyer might be a pension fund

#109

Post by briefcomment »

foobiekr wrote: post #87
briefcomment wrote: post #46

Earlier quoted context omitted.

Once you own all housing, what's to stop you from increasing rents?

The move BlackRock will do, based on their history, is to incentivize increases in adjacencies to drive value. What I mean by that is that they will, for example, encourage new office complexes in locations favorable to their new rental domains. Think SF bay area’s natural and warped logic locating massive complexes on the peninsula or ST instead of Fremont/San Jose.

Right, but the greater the share of the market you own, the less you have to invest in making your offering more attractive, and the more you can start simply increasing rents.

They along with others are trying to build a monopoly/oligopoly in housing. Naturally we would expect regulations against this, but the fact that it's going this far is a bad sign.

Re: If you sell a house these days, the buyer might be a pension fund

#110

Post by sagarm »

dv_dt wrote: post #33
commandlinefan wrote: post #4

This hurts people who already own houses, too - property taxes are assessed on the appraised value of the home, which is a function of what the similarly-sized houses in your area sold for most recently. My property taxes have increased 10% every year for the past several years (and it would have been more if not for a legislative 10% annual cap). I worry that there will come a day when I've paid off my mortgage but…

This is why CA has prop 13 which limits increases to property taxes from year to year specifically because CA had seem property boom/bust cycles kicking people out of homes because of irrational real estate prices.

Towns normally set the property tax rate to meet their budget, so appraisals increasing across the board would not increase you property taxes.

Prop 13 leads to perverse outcomes like subsidizing slums and trust fund kids while penalizing new homeowners and people improving their property. It's also simply unjust for two neighbors with similar properties to pay different rates based on their age or even ancestry.

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