131–140 of 634 posts
Best news I've seen all month. I hope anyone doing this kind of thing with residential real estate falls hard.
They are not the problem with residential real estate prices. The real problem is people that prevent additional housing from being built.
Earlier quoted context omitted.
Projected population of US in 2050 is 458 million from the current 330 million. Given that underlying reality, housing is going to be an investment.
They are gonna need cars and furniture, yet those are not an investment. Is USA running out of land, or Timber, or unemployed people that could be employed to build a house? We need to get institutional 'investment' out if house flipping and fix zoning. https://youtu.be/CCOdQsZa15o
Fortunately, this is an infinite resource, and we could flip simple governmental switches to allow more housing, which generates more property tax to grow the infrastructure.
However, existing homeowners are a political bloc that mightily resists flipping that switch, both because they don't like to see change, and also because they benefit financially from a housing shortage.
The institutions investors name these exact dynamics in their SEC filings: they know it's a good investment because local politicians listen to homeowners, and the homeowners will guarantee the shortage.
So in all honesty, I welcome institutional investors, and lots of them, because one their are more renters, the politics can be flipped. The renters, if they show up as a voting bloc, can finally open up the zoning to allow more housing.
Resident homeowners and institutional investors are no different here, they are both greedy investors, except the homeowners are even more greedy (they don't want new people in their city), and rhe homeowners have far more political control.
This is a good example of the fallacy of youth: buying too far into hype and being all "the sky is falling" with negative news. It wasn't long ago that we were reading how Zillow et al were going to buy up all the housing stock and keep millenials and Zoomers homeless forever. The people saying this have obviously never gone through a "bust" cycle. This is unsurprising as we've now been in the longest bull market in…
You're right, but the difference these days is the Fed putting the pedal to the metal even when fiscal spending and economic data at all time records. We haven't seen this phenomena since the 70s when inflation was running hot and the Fed did nothing for many years. Back then, prices continued to rise nominally for many years. I suspect the Fed will tighten somewhat (taper should be announced tomorrow), but they keep…
I hope so, but keep in mind, the Fed has lacked the will to tighten even in the most favorable conditions -- strong market, no covid -- merely because banks screamed bloody murder about having to pay slivers of a basis point more on overnight loans or (heaven forbid) stay more liquid so they don't need to get as many loans.
HN stories about "liquidity injections":
https://news.ycombinator.com/item?id=22559175
They seem to be flipping the houses fast and hard around my neighborhood. One of my favorite things to do is walk around with the dog and see houses go up for sale. Lately, I noticed houses sold only to be relisted by Zillow like 30 days later at $50k+ the original price. And they actually seem to be able to sell them that high. My house is currently worth 3x what I paid for it back in summer of 2013.
Earlier quoted context omitted.
I disagree strongly with this sentiment. Clearly Zillow is not going to buy all the houses in America and turn us into serfs overnight - that is an absurd strawman. What? Zillow is far from the only actor here trying to enter this space. It's quite ridiculous to claim, as you are, that industrial-scale home speculation is doomed to fail since there are boom and bust cycles and therefore we don't need to worry. That's…
> We really don't have any direct, past precedent for this type of situation Yeah, we do. Massive housing speculation in the mid-2000s. > The fact that Zillow failed on their initial attempt does not imply that this can't work I'm reminded of Gamestop here. Around the time $GME first spiked and then fell you saw lots of people trying to encourage everyone to hold. What this ignored is that someone would be left holdi…
Possibly. Real estate is different than most other markets for a few reasons. Favorable tax treatment, sheer market size, high barriers to entry, and being at the bottom of the hierarchy of needs.
I'm worried if this isn't the inevitable path of concentrated wealth accumulation. Stocks have grown too over-valued? Move to housing, a gigantic market that people require to survive.
This is a good example of the fallacy of youth: buying too far into hype and being all "the sky is falling" with negative news. It wasn't long ago that we were reading how Zillow et al were going to buy up all the housing stock and keep millenials and Zoomers homeless forever. The people saying this have obviously never gone through a "bust" cycle. This is unsurprising as we've now been in the longest bull market in…
Yes, indeed. What's more, those people have a large, receptive audience: An entire generation that has never gone through a "bust" cycle. We're talking about nearly everyone in their early 20's to their mid-30's who joined the workforce after the global financial crisis. They have zero personal experience as to what it's like to be an asset owner in a prolonged bust or bear market.
Earlier quoted context omitted.
> We really don't have any direct, past precedent for this type of situation Yeah, we do. Massive housing speculation in the mid-2000s. > The fact that Zillow failed on their initial attempt does not imply that this can't work I'm reminded of Gamestop here. Around the time $GME first spiked and then fell you saw lots of people trying to encourage everyone to hold. What this ignored is that someone would be left holdi…
Real estate speculation has likely been around for thousands of years; it’s certainly not new. But, do you see any difference between A. individuals in the mid-2000s speculating on real estate based on individual whims and taking out mortgages they should not and B. large corporations with access to massive datasets previously unavailable, teams of PhDs trained to work on this, equipped with game-changing modeling ca…
Earlier quoted context omitted.
Decades of under-building due to restrictive zoning laws will do that.
Yes, that - plus the rapid reversal of white flight to the suburbs among young people in the last 10-15 years (more of an east coast phenomena). It is both a demand and supply problem, but short of creating a Hukou system I don't see any solution but building.
The massive buy-ups in West & Central FL have led to an unprecedented shortage in housing. Rentals get 400 applicants each day and people with money in the bank are facing homelessness. People without have little hope.
This is a good example of the fallacy of youth: buying too far into hype and being all "the sky is falling" with negative news. It wasn't long ago that we were reading how Zillow et al were going to buy up all the housing stock and keep millenials and Zoomers homeless forever. The people saying this have obviously never gone through a "bust" cycle. This is unsurprising as we've now been in the longest bull market in…
Earlier quoted context omitted.
You're right, but the difference these days is the Fed putting the pedal to the metal even when fiscal spending and economic data at all time records. We haven't seen this phenomena since the 70s when inflation was running hot and the Fed did nothing for many years. Back then, prices continued to rise nominally for many years. I suspect the Fed will tighten somewhat (taper should be announced tomorrow), but they keep…
>I suspect the Fed will tighten somewhat (taper should be announced tomorrow), but they keep stating that inflation is transitory. I hope so, but keep in mind, the Fed has lacked the will to tighten even in the most favorable conditions -- strong market, no covid -- merely because banks screamed bloody murder about having to pay slivers of a basis point more on overnight loans or (heaven forbid) stay more liquid so t…
But the unfortunate aspect of the current fed is that they care way too much about the markets. And they are very short term oriented. They're pulling the good times of the future into the now, at potentially major costs later.
I think Powell is just too focused on being liked and retaining his job, at the root of it. That's the only explanation that makes all the pieces fit.