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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

#651

Post by sleepdreamy »

BeetleB wrote: post #61
gbasin wrote: post #13

The CoreLogic data shows that what it calls “mega” investors, with a thousand or more homes, bought 3% of houses last year and in 2022, compared with about 1% in previous years, with the bulk of investor purchases made by smaller groups.

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…

If your mortgage is 1000 and you charge 3 Students 700 a head, you now have 1100 left over. Put 500 away for repairs and pocket the 600. 600x5 = 3000 USD Straight Profit. If you don't put anything away for repairs: 2100 - 1000 = 1100 x5 = 5,500 a month = 66,000 a year for 5 homes

That is shockingly bad. I was going to make a comment about how ridiculous your comment is..until I did the math! Kudos

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

#652

Post by everforward »

giantg2 wrote: post #242
bobthepanda wrote: post #222

Earlier quoted context omitted.

You can lead a horse to water but you can‘t make it drink. Job poor areas in the US have no shortage of incentives or policies designed to lure companies there, but have had little success over the past few decades.

I'm wondering why that is. I would think that with the growing movement against NIMBYism that there would be enough people fed up with those sorts of policies to start moving out of the areas they don't agree with.

There's a chicken and egg problem.

Workers don't want to move to sparsely populated areas because there aren't many jobs, and companies don't want to do it because there aren't any workers.

E.g. I wouldn't mind working in a sparsely populated area, but there's a good chance my employer would be the only one I could work for (without giving up and working retail or something). My employer doesn't want to relocate there because good luck convincing people to relocate there given the above.

There are infrastructure problems, too. Good luck getting a business class 40Gbps Internet connection in Nowhere, Wyoming.

It would go a long way if remote work was normalized (or legislated), and the FCC actually forced ISPs to run reasonable Internet connections outside of major metropolitan areas.

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

#653

Post by standardUser »

mancerayder wrote: post #563
standardUser wrote: post #210

Earlier quoted context omitted.

Most rentals in NYC no longer work with brokers, especially in the low-to-middle range.

On what basis do you say that? The Fee rentals have all returned when the laws banning them were re-interpreted. When you say low to middle range, do you include rent-stabilized units in moderate to hot neighborhoods?

On the basis of living in Manhattan and knowing a ton of people who have moved places over the last few years, including myself. Also, just go look at StreetEasy.

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

#654

Post by adgjlsfhk1 »

akomtu wrote: post #615
adgjlsfhk1 wrote: post #599

Earlier quoted context omitted.

low density suburbia only survives by siphoning funds away from the nearby city.

So a lone farm in the middle of nowhere must be an economic blackhole that siphons money even from suburbia?

if you run electricity, water, sewage, fiber optics, and roads to it, absolutely! The problem with suburbs is that they demand the same utilities as dense areas without paying the increased cost of that infrastructure.

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

#655

Post by quantified »

brianwawok wrote: post #634
antisthenes wrote: post #439

Earlier quoted context omitted.

1. True, but housing prices rarely drop in desirable areas (usually where good jobs and schools are). If, for some reason, you decide to stay in a town with a dying industry, then yes, this is true. 2. So does a fixed-rate mortgage. Even better, refinancing a mortgage during a low-rate period (e.g. 2012, 2020) actually lets you reduce your payment, while contributing more to equity. How often do you have an opportuni…

So say global warming continues. Huge chunks of Cali aren't fit to live in. Salt Lake dries up. What happens to all of those home values? Home values rising historically is good, but I don't think a clear win through all time. There is no instrinsic reason a house value should rise faster than inflation. You can always build a new house for cost X. Buying existing means that new house supply is too low or too costly.

I don't look at a house as an appreciating asset, that would be stupid. Market forces control the price, and those are predominantly out of your control.

But for what I've paid in rent over the years, I could have paid for entire dwellings. And had the freedom to fix and alter things per my desire.

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

#656

Post by quantified »

notch656a wrote: post #511
quantified wrote: post #499

Earlier quoted context omitted.

Negative equity with a roof over your head is better than on the street. Your equity going to zero is still cheaper than raising a family to adulthood in a rented place.

I agree there are lots of upsides to having a house. I definitely get some used car salesman vibes whenever someone tries to sell up the upsides of negative equity, though. Having no chance to have negative equity is pretty much unequivocally one of the few absolute advantages of renting. The other being (typically) lower transactional costs for short term occupancy.

Negative equity means little. So what if it's worth less when you sell than when you buy? Compare the net on that with the loss you take from renting.

Only a fool treats their dwelling as an appreciating asset anyway. It's subject to market forces.

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

#657

Post by quantified »

brianwawok wrote: post #294
quantified wrote: post #95

Earlier quoted context omitted.

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

* It guarantees you do not lose money if the home values around you drop * It gives you a fixed monthly houseing cost. No "10k new roof" or "1k new stove" suprises hit you. * If you are say, saving 50% vs buying, you can put this difference in an index fund. This would over 10 or 20 years potentially give you a LOT of money over buying. Look, buying is mostly great. It's one of the biggest builders of wealth for most…

The real wealth building doesn't come within a generation from asset appreciation. That's just speculation, the market can screw you.

But once it's paid for, it's paid for. Now you just need maintenance and taxes, easier on a fixed income. And it's easier to build intergenerational wealth if one of your children doesn't need to blow money at all on rent or home purchase.

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

#658

Post by candiodari »

slg wrote: post #641
candiodari wrote: post #623

Earlier quoted context omitted.

In order to get inflation up to 2% the extreme measures of the last 15 years which drove up the cost of housing to such extreme heights in the first place were taken. > The government could put the same energy to keeping housing costs in pace with inflation. They don't That's exactly what they did. Not just housing, but also food, cars, ... It's just that housing costs respond a lot better to credit availability than…

>In order to get inflation up to 2% the extreme measures of the last 15 years which drove up the cost of housing to such extreme heights in the first place were taken. Housing costs greatly outpacing inflation is not a recent phenomena of the last 15 years. In fact, home prices increased faster in the prior 15 years than the last 15 years. >The government has no direct control over any kind of pricing except the pric…

> ... home prices increased faster in the prior 15 years ...

Only because the averages get pulled down in places where people don't want to live. Plus effective inflation going up (you know, the inflation including housing and education, not the made up government inflation number)

> I'm not interested in debating the meaning of "direct control", but one rather direct control they have is the federal government could repeal the mortgage interest deduction. That would immediately decrease the financial incentive to buy a home therefore decrease demand and lower prices.

Repealing it would create a big advantage for investing in homes rather than buying them to live in them. This sounds to me like the opposite of what you want. But maybe I'm an idiot.

Reality: for any resource there is supply X and demand Y, in specific markets.

X > Y: it matters a lot less what the exact policy is.

Y > X: someone will be very, very unhappy.

Rent prices, what we really care about, are not determined by who owns a house. They are determined by the amount of houses.

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

#659

Post by rolandog »

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…

Yeah, this is what has kept me from investing.

People in ivory towers whipping black-box abstractions of businesses into needing to produce more profits through wage theft, cost-cutting by skirting regulations, or outsourcing to unregulated places.

There's little oversight throughout the process, and filled with the kind of people that want to turn everything into a business... and that have proposed "treating but not curing cancer" [1].

[1] https://www.cnbc.com/2018/04/11/goldman-asks-is-curing-patie...

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

#660

Post by rolandog »

slg wrote: post #40
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…

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? Of course the more attractive we make home ownership as an investment, the more investors will flock to the market. We need policies specifically benefiti…

I would like to think that we are still able to take things back onto our own hands by making better choices and educating ourselves and shunning for-profit companies.

I, for one, would find it better to not spend my final days at the most profitable nursing home.

Answering your last paragraph: Worst case scenario, it'll probably take a couple of generations of literally living at our parent's house, waiting for the investor class to die out clenching the deeds to all houses and then finally being able to take back the world and start responsibly owning stuff. The cynic in me says that living at one's parents would be outlawed by political cronies.

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