Investors bought a quarter of US homes sold last year • Hacker News Board

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

#31

Post by geodel » Tue, Aug 23, 2022, 6:44 PM UTC

staindk wrote: post #7

cammikebrown wrote: post #3

Pretty hilarious to see “Why is Rent Skyrocketing?” as the article directly under this one on the front page.

Hilarious sure, but also sad and concerning. I'm tentatively alright with the idea of renting forever and never owning property... but with rent increasing and investors buying up more and more property, it looks like things will get uglier and uglier. I am not alright with paying absurdly high rent.

Well, the idea that owner will be saddled with serious repair and maintenance whereas renter on virtue of being a renter will just move out to house on next street risk free seems unsustainable to me.

Increasing rents are a kind of distributing risks of costly maintenance that renters doesn't want to care about.

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

#32

Post by epistasis » Tue, Aug 23, 2022, 6:44 PM UTC

I'm sure the percentage is much much higher in supply constrained cities, because those cities are where there's much more opportunity for speculative real estate growth, and the local political structures are dedicated to keeping the supply constrained, and the speculative real estate asset price growth unchecked.

At the core of a lot of this is the NIMBY behavior and downzoning that started in the 1970s. It's hyper-commodified housing, while decommoditizing out places to live. (Please note that the difference between commodify and commoditize, here.)

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

#33

Post by ddevault » Tue, Aug 23, 2022, 6:45 PM UTC

didgetmaster wrote: post #5

What constitutes an 'Investor' in this article? If I see a distressed home for sale in my neighborhood and decide to buy it, fix it up, and rent it out; this article seems to put me in the same category as institutional investors who come in and buy or build entire communities of homes.

Correct. Landlords are reprehensible, including small ones.

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

#34

Post by __derek__ » Tue, Aug 23, 2022, 6:45 PM UTC

itake wrote: post #15

thatguy0900 wrote: post #9

Earlier quoted context omitted.

Are you not an investor in that situation? The person who wants to own a house to actually live in is the only one not being an investor.

I think the concern is local investors keep the money in the local economy, whereas 'foreign' investors are extracting value from the local community.

Small-scale investors are not necessarily local. It's anecdata, but I know quite a few Seattle-area folks who bought rental houses in LCOL/MCOL areas over the last several years because the local market was too expensive. They still pay property taxes, though, and most property managers are local-ish.

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

#35

Post by yardstick » Tue, Aug 23, 2022, 6:45 PM UTC

JamesBarney wrote: post #24

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 just need to remember that banning housing investment means banning rentals which is problematic for people who don't have good credit and a down payment.

Imagine if housing was cheap enough that paying the mortgage was around the same as what it now costs to rent.

There definitely needs to be some rentals, but I believe that there needs to be controls over how many and the rental price.

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

#36

Post by aeternum » Tue, Aug 23, 2022, 6:45 PM UTC

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.

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

#37

Post by ISL » Tue, Aug 23, 2022, 6:46 PM UTC

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…

One REIT's margin is another REIT's opportunity.

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

#38

Post by _fat_santa » Tue, Aug 23, 2022, 6:46 PM UTC

didgetmaster wrote: post #5

What constitutes an 'Investor' in this article? If I see a distressed home for sale in my neighborhood and decide to buy it, fix it up, and rent it out; this article seems to put me in the same category as institutional investors who come in and buy or build entire communities of homes.

Seems everyone that bought a home for anything other than living in it. In the article they even mention:

> 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.

So most of the percentage increase is done by mom-and-pop investors rather than groups like Blackrock, Vanguard, etc. With that said the article definitely tries to paint the picture that all of these investors are institutional ones, and burying that important lede.

I get the hate against institutional investors going in and buying up entire neighborhoods. But the sentiment that we should just abolish landlords is rather dumb IMO. There's a massive gap between someone being able to afford $1200 in rent and being able to afford a home with all of the added costs.

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

#39

Post by dogman144 » Tue, Aug 23, 2022, 6:46 PM UTC

rngname22 wrote: post #8

I really hope that battery technology, EV technology, and self-driving technology lead to a tremendous boom in full-time RV / vanlife popularity and make it a better quality of life than traditional fixed housing and all the people who bought up housing as an investment vehicle see their money go poof. It's like using potable water or the air we breathe as an investment vehicle.

I think it’s a legitimate counterpoint that could force some changes, but other aspects would have to go into it like intentional communities around this technology such that kids can go to schools, taxes are tenable, etc.

interesting to consider. I think tax status assumptions and making van life work for a 2-child family are the main blockers. Starts sounding a lot like a high-end trailer park idea too.

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

#40

Post by slg » Tue, Aug 23, 2022, 6:46 PM UTC

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 benefiting owner occupied homes or we need to stop treating the basic human need for shelter as an avenue for investment.

Neither seems likely to happen because we have already waited so long that the moneyed interests now have too much to lose and won't allow what needs to be done to happen.