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US will ban Wall Street investors from buying single-family homes

reuters.com

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Re: US will ban Wall Street investors from buying single-family homes

#351

Post by [deleted] »

observationist wrote: post #283
roadside_picnic wrote: post #48

The key word here is "Wall Street". And this statement is playing off a popular misconception around corporate investors buying up American houses. There has been a bit of a panic around "Investors buying up all the property!!!" With people often citing Black Rock and Blackstone as the main culprits. But most of the "investors" buying up property are individuals purchasing investment properties. Here's an article on…

It's not that simple - the problem is that those institutions are market makers. They are a tiny portion of the market, but a huge driving force in setting and manipulating prices, because their properties get leveraged, instrumentalized, and securitized, with derivative products, speculation, and all sorts of incentives that you don't normally want operating in the arena of housing. The things that they do have mass…

[deleted]

Re: US will ban Wall Street investors from buying single-family homes

#352

Post by cloverich »

mycodebreaks wrote: post #261
roadside_picnic wrote: post #48

The key word here is "Wall Street". And this statement is playing off a popular misconception around corporate investors buying up American houses. There has been a bit of a panic around "Investors buying up all the property!!!" With people often citing Black Rock and Blackstone as the main culprits. But most of the "investors" buying up property are individuals purchasing investment properties. Here's an article on…

Controversial, but for affordability reasons, there even should be a cap on how many homes an individual can own for rentals. For the sanity in the housing market, members of society need to be driven to participate in other business activities for income/revenue, not rentals.

This would certainly drive down prices - how much is an open question. But I think its a fair compromise, UNTIL we actually do have enough homes for everyone. Until then something has to give - right now its people who can't own a single home that are yielding, but IMO it would be much more fair to ask people who already own a home to yield (not buy more than one). Ultimately that's the tradeoff to discuss.

Re: US will ban Wall Street investors from buying single-family homes

#353

Post by standardUser »

Glyptodon wrote: post #306

Just build more housing, the whole "let's make rules to avoid the easy and obvious solution" trend annoys me.

Utilizing vacant properties is easier and cheaper than building new ones, by a massive margin. We should do both, but ignoring perfectly good homes in desirable locations being used by nobody is silly.

Re: US will ban Wall Street investors from buying single-family homes

#355

Post by pcurve »

riazrizvi wrote: post #338

This will absolutely help. It’s easy for these institutional players to downplay their involvement with select stats, to play PR defense, but platforms like Zillow work with institutional funds to sell them an information advantage that means they are at the end of the market that does the most upward impact on pricing. People don’t have a natural feel for how little you need to alter flow to cause liquidity in a sys…

I also think this will help. There's no one size fits all solution. I hope it goes through.

Re: US will ban Wall Street investors from buying single-family homes

#356

Post by rsanek »

linuxftw wrote: post #213
63 wrote: post #158

Earlier quoted context omitted.

"From" other countries is overly broad and I assume not what you intended. I am actually interested though in the idea of legislating how frequently home owners have to actually be within range of the home, for example. A friend has had a hell of a time with a landlord in Malaysia who's never seen the property.

Many countries prohibit non-citizens from owning any real estate or businesses at all, even if they have a long-term resident status. Thailand is one example. Ownership is limited to 49%, a local partner must own at least 51%.

does that work out in their favor in the end? seems like that would really deter investment in the country. I'm not familiar with any large thai corporations.

Re: US will ban Wall Street investors from buying single-family homes

#357

Post by observationist »

WalterBright wrote: post #325
observationist wrote: post #283

Earlier quoted context omitted.

It's not that simple - the problem is that those institutions are market makers. They are a tiny portion of the market, but a huge driving force in setting and manipulating prices, because their properties get leveraged, instrumentalized, and securitized, with derivative products, speculation, and all sorts of incentives that you don't normally want operating in the arena of housing. The things that they do have mass…

> They are a tiny portion of the market, but a huge driving force in setting and manipulating prices, because their properties get leveraged, instrumentalized, and securitized, with derivative products, speculation, and all sorts of incentives that you don't normally want operating in the arena of housing. Raising prices when you only have a tiny portion of the market does not work. People won't buy them when there's…

It's not just raising prices - it's holding prices steady at some point without the concurrent pressure to sell, for example, or manipulating other markets in order to raise or lower prices in an area, or using other mechanics to manipulate pricing, across the entire market, depending on the intended actions. If they intend to purchase properties, it benefits them to depress pricing in the area, if they intend to rent, they can afford to impose artificial scarcity until they force renters to meet their rates, and so on.

Normal landlords don't have effectively infinite money with no forces bearing prices down, nor do they have the capabilities to influence markets. Even tiny percentage shifts can result in significant fluctuations in the prices consumers see. It's a very nuanced and complex system in which these institutional investors have very outsized influence.

Re: US will ban Wall Street investors from buying single-family homes

#358

Post by EugeneG »

observationist wrote: post #283
roadside_picnic wrote: post #48

The key word here is "Wall Street". And this statement is playing off a popular misconception around corporate investors buying up American houses. There has been a bit of a panic around "Investors buying up all the property!!!" With people often citing Black Rock and Blackstone as the main culprits. But most of the "investors" buying up property are individuals purchasing investment properties. Here's an article on…

It's not that simple - the problem is that those institutions are market makers. They are a tiny portion of the market, but a huge driving force in setting and manipulating prices, because their properties get leveraged, instrumentalized, and securitized, with derivative products, speculation, and all sorts of incentives that you don't normally want operating in the arena of housing. The things that they do have mass…

“properties get leveraged, instrumentalized, and securitized, with derivative products, speculation, and all sorts of incentives”

Spoken like someone has no clue what they are talking about and just throwing out jargon

Re: US will ban Wall Street investors from buying single-family homes

#359

Post by [deleted] »

Analemma_ wrote: post #219
tjwebbnorfolk wrote: post #190

Earlier quoted context omitted.

I don't know if you've noticed, but politicians aren't in the business of root-cause analysis or actual solutions. They are in the business of making things either slightly better or significantly worse for certain people. This would make the situation slightly better for people who want to buy houses. Perhaps it's the case I'm 100% for this mainly because my extremely low expectations for politicians have been met a…

I have to admit, I'm very used to politicians tossing out non-fixes as a distraction when there's some problem, but your comment is the first case I've ever seen of a voter openly acknowledging that it's a non-fix, but being happy about it anyway. And not just that, but actually attacking the people pointing out that it's a non-fix, and casting sinister aspersions on their motives. This isn't even shooting the messen…

[deleted]

Re: US will ban Wall Street investors from buying single-family homes

#360

Post by derangedHorse »

WalterBright wrote: post #292
bs7280 wrote: post #260

Earlier quoted context omitted.

I propose two changes to (try) and broadly solve this: - Additional property tax if you do not live in your home fulltime. This includes vacation homes. - First time, US Citizen, non-corporate homebuyers can get a loan at the federal interest rate. If I were to try and buy the condo I rent, due to interest rates, taxes, and HOA's I would be paying $1000 more per month. At the end of my mortgage I would given the enti…

> Rich investors and companies effectively get to buy homes at a discount vs average joes. Suppose you had $100,000 in cash, and buy a house for $100,000. You'll not be paying 5% interest on a mortgage. But if you did not buy the house, you would be investing that $100,000 for a 5% return. So, you're either paying 5% on the mortgage, or foregoing 5% return for investing that money. The rich person is not getting a di…

An intelligent investor wouldn't buy it outright, they'd get a mortgage with a lower than average interest rate. The appreciation of the home will cover the interest rate over the long run and the interest rate is a small price to pay for keeping most of that $100,000 liquid for other investments.
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