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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

#411

Post by kortex »

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…

Going by the graph in the article, that's still ~13% of homes owned by investors with >5 properties. And that's total of what is currently held, it speaks nothing of liquidity. That number likely includes investors who have had that property for a long time, the current property buy-up likely means far greater than 13% of the market right now is going to those sorts of aggregators.

Dropping the price of a house by a few percentage points can be the make-or-break for some families. And small changes in availability can have large impacts on price.

If we banned (or severely penalized) all entities from owning more than 5 residential homes, this would probably reduce cost by a few percentage points across the board. That's thousands of dollars.

Personally, I think unoccupied homes in general ought to be penalized (beyond just tax burden, an actual vacancy tax).

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

#413

Post by jazzyjackson »

lawlessone wrote: post #332
RegEx wrote: post #298

Earlier quoted context omitted.

I believe your comment is operating under the assumption that people are merely choosing to rent over buying because it's the more economically wise choice. That's not how things work in reality. Many people want to buy but cannot put up the initial costs.

> Many people want to buy but cannot put up the initial costs. This, monthly rent actually costs more here in Ireland than what you would pay monthly for mortgage.

Many things cost less when you pay for 40 years up front

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

#414

Post by alephnerd »

bluGill wrote: post #259
mikkupikku wrote: post #159

Earlier quoted context omitted.

As they should be.

If they then rent these houses out and keep them maintained I don't care that they own them. Of course they should not be allowed to have a monopoly on houses in any area (including indirect monopoly by agreeing to minimum prices with others). Landlord is an important job that someone needs to do for the people who owning their own house is the wrong decision.

> If they then rent these houses out and keep them maintained I don't care that they own them...

Pension funds don't do that (it's a headache).

Instead, they allocate a certain amount of capital to funds specialized in Real Estate who will invest in real estate firms like Greystar who are forced to maximize revenue.

Much of the financialization people keep complaining about on HN is because institutional investors are now much more demanding in comparison to 40 years ago when institutional investing meant putting all your money in bonds and a bit of domestic stocks and hoping to get a 5-6% return.

Basically, the Yale, OTPPF, and ADIA model goes brrrrrrr as institutional investors now demand double digit returns.

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

#415

Post by klipklop »

georgeburdell wrote: post #52

This will help out home prices in a lot of lower priced markets, but do little in higher priced markets. In the Bay Area, many houses are bought up by non-occupying internationals. I've been in a couple of such houses. It's bizarre walking into a $5M+ hilltop mansion that's completely bare inside except for a token "student" living out of one room.

> many houses are bought up by non-occupying internationals.

Maybe they are next?

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

#416

Post by firesteelrain »

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…

I can only provide anecdotal information. In my HOA community we had to make a rule that you need to live in your home for two years before you can rent it. This effectively stopped the companies like Innovation Homes from buying up properties in our neighborhood. Post housing crisis-2015 it was getting pretty bad with the investors purchasing the single family homes. I don’t know if places like Innovation Homes qualifies as “Wall Street” or not.

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

#419

Post by fc417fc802 »

estearum wrote: post #365
observationist wrote: post #357

Earlier quoted context omitted.

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 ren…

This is extremely silly. Prices are high because we don't build enough houses which is mostly because it's really expensive to build houses, then the houses we have built are all owned by empty nesters and people with 1 - 3 investment properties. Everything else you're describing is completely ridiculous.

> which is mostly because it's really expensive to build houses,

Assuming you're referring to the typical high CoL areas, the shortage has very little to do with the expense of building. The zoning laws don't permit sufficient supply in those areas. And that's quite unlikely to change (at least quickly) because anyone pushing such reform would be obliterating the average Joe's net worth.

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

#420

Post by delecti »

Simulacra wrote: post #19
delecti wrote: post #6

I get that title length is limited, but the "Trump Says" in the title is a pretty significant detail. He "says" things all the time.

That's true, but to play devils advocate for a second, just because he says something doesn't make it wrong or bad. Banning Wall Street from buying single-family homes is a great thing that I completely support, and I don't really care which president makes it happen.

The policy would be great! You aren't playing devil's advocate for what I said. I wasn't talking about the merits of the policy at all. Him saying it just doesn't have any connection to whether the policy will ever exist. The headline without that detail is wrongly implying certainly that isn't warranted.
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