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Investors bought a quarter of US homes sold last year

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Re: Investors bought a quarter of US homes sold last year

#171

Post by wizofaus »

chollida1 wrote: post #53
onlyrealcuzzo wrote: post #17

Earlier quoted context omitted.

> I am not alright with paying absurd rent. Then you should either: 1) Buy a house to live in 2) Buy a house to hedge against rents going bananas The 30-year fixed rate mortgage at negative real rates is the biggest handout the world has ever seen.

Yep Millennials, Gen X and Boomers have all been handed a once in a lifetime gift here. Each of those generations made out like bandits with low housing prices until the last few years and low interest rates. Gen Z and the generations to come have a real reason to be pissed at the rest of us.

In Australia at least there's a substantial gap between affordability for millennials and us Gen X'ers, reflected in homeownership rates. The trend only seemed to have been getting worse throughout covid (governments threw a lot of money into economic recovery, combined with super low interest rates, driving up house prices despite near zero immigration and absence of foreign students etc., though they're coming down now). Was that not true in the US? Gen Z are just coming into house- buying age now, though my own son is likely 8-10 years off from being a good position to afford anything at all, and without my help (or a lottery win), it's not going to be a house or even apartment anywhere close to where I live. But a lot could change in that time.

Re: Investors bought a quarter of US homes sold last year

#172

Post by [deleted] »

Test0129 wrote: post #93
aprdm wrote: post #69

Earlier quoted context omitted.

The concept of credit score isn't something that has always existed in humanity. It's something that we can go on without, even more so given the ridiculous profitability of banks

Credit scores are probably the most useful metric for a person in general. The reason isn't because it's an assessment of creditworthiness, but it saves the time interviewing each person for each loan, asking for quite literally thousands of pages of documentation proving they are creditworthy, etc. If you recall how these things were done before credit scores it was not pretty. Without them lending would virtually c…

[deleted]

Re: Investors bought a quarter of US homes sold last year

#173

Post by thepasswordis »

paxys wrote: post #132
thepasswordis wrote: post #88

I'm so frustrated by some of the conversations people get in around housing. They want to live in the most desirable places on planet earth, and seem to think that we should just abolish the concept of property ownership to accomplish this. What do you guys think happens when you get what you want, and nobody can "own" property anymore? Do you think there is an unlimited amount of single family 3000 square foot homes…

This is such a twisted framing of the issue. No one wants to "abolish property ownership". In fact housing proponents want the exact opposite – give everybody the opportunity to own a house rather than a select few large corporations and investors. Let me build my own house on a piece of land in or near the city, just like my grandparents did just a couple of generations ago. Remove years worth of excessive permits,…

>just let me build a house where somebody else already owns the property where I want to build that house.

How does that work out in your mind without abolishing the concept of property ownership? What happens when somebody wants to build their house where you already have yours?

Re: Investors bought a quarter of US homes sold last year

#174

Post by BeetleB »

aprdm wrote: post #76
BeetleB wrote: post #61

Earlier quoted context omitted.

1000 is too high a threshold. I wonder what it would look like if you dropped to 50 or 100. I hang out in RE circles. Anecdotally it seems that probably most of these are bought by people who have just 1-20 properties - regular folks who have regular jobs but are looking for ways to supplement their income and hopefully quit their jobs. Owning merely 5 extra homes is not enough to replace income, and in some markets…

IMO extra properties should be heavily taxed. Say you have more than 3, it should basically not be profitable anymore. No one wins if people are hoarding houses

Would a duplex count as one property or two? How about a 4-plex?

Would this apply to apartment complexes as well? As in, it won't be profitable to own more than 3 complexes? Would that result in most capital going into megacomplexes and fewer people wanting to buy small apartment complexes with only, say, 10 units?

Not disagreeing with you, but there are nuances involved.

Re: Investors bought a quarter of US homes sold last year

#175

Post by sokoloff »

aeternum wrote: post #36
sillystuff wrote: post #12

In 2012 I was looking at investing in REITs. One REIT's pitch was that they owned such a large percentage of the rental housing in Tampa Florida, that even though vacancy rates were high, and rents were going down throughout the nation and other areas in the state of Florida, they were able to keep rents high in Tampa. Disgusted, I realized the harm that REITs and private equity are doing to housing markets, and want…

There are so many housing incentives (tax-breaks, etc.) designed to encourage home ownership a very simple solve would be to ensure those only apply to owner-occupied housing and limited to a single home per household.

Companies are charged taxes on their profits. The interest on money borrowed in furtherance of a business is just like any other business expense: deductible.

The owner-occupied mortgage interest deduction serves to put owner-occupants onto the same footing as businesses; it’s not an incentive that gives them preference, but rather (closer to) equal footing.

Re: Investors bought a quarter of US homes sold last year

#176

Post by tshaddox »

davidw wrote: post #107
tshaddox wrote: post #97

Earlier quoted context omitted.

> We have spent decades telling American families that homeownership is the safest investment. We then spent decades enacting policies to ensure this is true. Do we think investors were going to just sit that out and ignore a safe and government protected investment? So one group wants to maintain a financial investment that was sold to them as a sure-fire way to make money with little work and little risk, and anoth…

Show up at any kind of planning commission or city council meeting and you will hear people absolutely UP IN ARMS that building some, say, apartments or townhomes or whatever will "destroy their property values". Even in markets when said property has like doubled in price over the last 10 years with no work from the owner-occupants.

Yes, I understand the desires of that group and the desires of the other group. I’m suggesting that, if we truly must choose only one group to satisfy, it’s not very difficult to decide.

Re: Investors bought a quarter of US homes sold last year

#177

Post by jmyeet »

Let me summarize all the problems here:

1. In most of the US it is quite literally illegal to build anything other than single-family homes ("SFHs"). This is a form of NIMBYism and reduces housing supply;

2. Part of (1) is that absolute necessity of car ownership in the US. This is by design to keep the riffraff (ie poor people) out;

3. We need robust public transit infrastructure to give people the option of living somewhere where they don't need a car to survive;

4. Pretty much anywhere you can build SFHs, you should be able to build multi-family dwellings ("MFDs"). Homeowners that own an extra unit or two on the same site as where they live is about the most ethical form of supply private rentals;

5. More states need to follow California's model of blocking a lot of NIMBYism at the state level. This requires towns to have an housing plan for affordable housing;

6. Ultra-luxury housing needs to be taxed punitively;

7. Cities and states need to be in the business in providing social housing as a significant supplier of housing. Americans in particularly have a kneejerk reaction against this as "socialism" or it'll be propagandized as slum housing. Vienna is about 60% social housing. Use that as a model;

8. Certain classes of housing should be illegal for corporations to buy. I'm fine with a corporation owning and running an apartment building with 200+ units with a management office onsite where they handle all the maintenance. I'm not OK with corporations constricting supply by buying up all the SFHs in a state.

9. We need to remove a lot of the tax benefits for investment property ownership (eg 1031 exchanges);

10. We need to remove a lot of beneficial tax treatment for home ownership period (eg Prop 13 in California caps property tax increases, inheriting property on a stepped up basis for CGT purposes);

11. AirBnB for anything other than a room in your house or a unit on your property (so you too have to live with the consequences) should be illegal.

This isn't a demand side problem. It's a supply side problem but we also need to restrict certain types of demand (eg REITs buying residential housing en masse).

Re: Investors bought a quarter of US homes sold last year

#178

Post by notch656a »

quantified wrote: post #95
boringg wrote: post #67

Earlier quoted context omitted.

Depends on where you live - this "renting is a poverty trap" only applies to certain places and depends on home values constantly increasing. If home values crash where you live then you spent years putting money towards a worthless asset.

Renting is always worth 0 as equity, so it's a total loss regardless.

But renting also guarantees you will never have negative equity.

Re: Investors bought a quarter of US homes sold last year

#179

Post by idontpost »

wiradikusuma wrote: post #154

"but many Republican lawmakers oppose such controls." — I'm not American and not in in the US, so I'm wondering, why in many articles I read, "Doing Good Things For People™" tend to be opposed by Republicans? 1. Are there a scheme to vilify them? Bcoz it's not even mentioned why they oppose (maybe they see Bad Things™ far ahead). 2. Are they not elected by the people?

No post body was provided.

Re: Investors bought a quarter of US homes sold last year

#180

Post by onlyrealcuzzo »

idiotsecant wrote: post #22
onlyrealcuzzo wrote: post #17

Earlier quoted context omitted.

> I am not alright with paying absurd rent. Then you should either: 1) Buy a house to live in 2) Buy a house to hedge against rents going bananas The 30-year fixed rate mortgage at negative real rates is the biggest handout the world has ever seen.

the insane mortgage rates we saw in the last few years really are going to be a generational redistribution of wealth that we'll talk about for the next century, I think. That might have been the last train out of town for the middle class to widely own housing in a lot of cases.

People have been making this argument since 1990.

The Federal Reserve MANDATES that consumer prices go up 2% per year. If house prices ever go down, they'll be there - waiting - to pump them up.

Prices will rarely ever go down substantially for a long period of time unless the Fed completely changes (I doubt it).

You can either:

1) try to time the market (difficult in housing, I'd argue not as impossible as equitities)

2) buy into the bubble

3) hope that the US basically turns into a different country

4) be ruined financially by missing out on the biggest handout in the history of the world (the 30-year fixed negative real interest rate mortgage)

Pick your poison.

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