441–450 of 634 posts
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This would be easy to fix with legislative that makes property taxes much higher for investment home properties. I don't think I've ever heard of a politician even talking about that though.
It'll drive up rents, but you could pair it with a renters' tax credit.
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We have these in BC - they were adopted in response to overseas real estate investment (and other factors) driving the Vancouver housing market insane. Canada also has a number of programs that make property purchase for new homeowners more affordable by waving some taxes and allowing interest free borrowing from your retirement fund. So the fight to keep housing affordable for everyone is a difficult one. One of the…
> Canada also has a number of programs that make property purchase for new homeowners more affordable by waving some taxes and allowing interest free borrowing from your retirement fund Some further flaws in the system: I was shocked to find out that the new home buyers tax credit only applies to homes under $500k - which in vancouver means it only applies to a handful of small condos. It's also not poolable, so two…
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This would be easy to fix with legislative that makes property taxes much higher for investment home properties. I don't think I've ever heard of a politician even talking about that though.
They are generally called non-primary residency taxes, and they're definitely a thing, and definitely getting more publicity, and most definitely need to become much stronger and more widespread.
Former real estate finance professional, here. If you were hoping this was a sign of the real estate market falling and perhaps its your chance to get a bargain, think again. > The company is seeking roughly $2.8 billion for the houses, which are being pitched to institutional investors, according to people familiar with the matter. Institutional investors (Blackstone, Blackrock, Colony, et al) will be being in bulk,…
This framing feels backwards to me - I thought the reason institutional investors see it as a valuable asset is because of NIMBYs constraining supply for them via local policy and obstruction. The institutional investors are a symptom of that policy, but the NIMBYs (and incentives that exist for existing owners like prop13) are the cause. Real Estate scaling supply to meet demand is in direct conflict with old proper…
If BlackRock doesn't continue to gobble up homes at current prices & rates - then his argument falls apart.
Does anyone have evidence that BlackRock is STILL buying properties en masse?
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I agree. I wish people understood more of what these "institutional investors" are doing. The Fed has essentially trapped us in a system where the likes of blackrock get access to essentially free Fed printing press money right of the rollers that they then use to buy up real assets at inflated prices, which only drives up the inflation that thereby also drives up the value of previous purchases at near zero rate int…
This is the end game of the baby boomers and economy really. Collectively everyone is hoarding onto property for their nest egg, investment funds get piles of their money from 401ks and pensions as well to invest into areas like real estate. A large chunk of retirement is now predicated on maintaining or increasing property values. The fed is now so fucked it can't even raise rates without immediately causing propert…
There will be pain in the short term, but you're creating opportunity for future generations.
Policy right now is all about pulling prosperity from the future into the present. IE higher valuation multiples today enrich current asset holders, but leave little growth for future asset holders
It used to be that the Fed was not too focused on asset valuations, and actually drove policy on the basis of their mandates. Unfortunately they're too cowardly to do that anymore.
It may be partly due to the short term focused political system in the US. China actually is explicitly acting to reduce property values to make homes more affordable for its people. Of course this triggered all sorts of second order effects like the evergrande situation. We will see if they follow through all the way, but so far they aren't backing down, despite what looks like an imminent systemic implosion of the property sector.
Sometimes people lose when they invest. That's how it's supposed to work. Removing that element creates mass amounts of moral hazard, which will end badly on its own at some point.
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> Zillow getting into flipping seems questionable to me. The customers are no longer aligned with the company on goals with something like this I'm currently looking to buy a house. Having a Zillow in between the seller and myself (as a dealer, not a broker) wouldn't be a slam dunk, but it would be worth some non-zero premium to me. (Just offering a counterpoint to the "uselessly driving up prices" narrative.)
Can I ask why? I'm also looking to buy a house and the Zillow offerings, from what I've seen, are not particularly competitive. They don't seem to care much about the quality of their housing stock. I'd also be leery of dealing with someone removed from the initial seller. It sounds like a great way to "launder" issues with the home where Zillow can say "eh, we didn't know about that."
Former real estate finance professional, here. If you were hoping this was a sign of the real estate market falling and perhaps its your chance to get a bargain, think again. > The company is seeking roughly $2.8 billion for the houses, which are being pitched to institutional investors, according to people familiar with the matter. Institutional investors (Blackstone, Blackrock, Colony, et al) will be being in bulk,…
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Not really. Mortgage rates are so low that even with only 5% down the monthly mortgage payments on a $400K house are similar to what someone would be paying for monthly rent in these cities. Mortgage rates are incredibly low and there are a number of options to reduce down payment requirements right now. Meanwhile, wages are up and better paying jobs are more common for young people. $400K isn’t out of reach at all f…
I'm not so sure: At current rates, assuming excellent credit, that's about $1700/month. If you're anywhere near the suburbs of a city, you can add another $500 to $1500/month in property taxes, and sometimes another $100 to $400/month in HOA fees. on that for a total pre-utility rate of ~$2400-$3600/month or roughly $30k to $43/ year. I live in the higher end of that range even though I'm in a modest home in a lower-…
$1500/month property taxes would be $18,000 per year. On a $400K home that would be 4.5%, which is significantly more than you'd find anywhere in the United States. The average property tax rate in the US is around 1.1%.
Moreover, most locations have an exclusion for the first $XXX,000 of home value. For example, a city might tax the first $100,000 of home value at 0% and then only apply the 1.1% rate (using the average here) to the remaining $300K.
Assuming a $100K home value exclusion and a 1.1% rate (average national rate), that comes to $275/month, which is about half of the lower end of the range you quoted and nowhere near the $1500/month upper end of your range.
Also, $400/month HOA fees would be several times higher than the average. HOAs aren't actually as common as the internet suggests, but when you get into an HOA in a neighborhood with $400K houses, you're probably going to be paying more like $100-150/month, not $400/month.
> $400k on a house is simply impossible for many millennials
Sure, but so is $2K/month rent. I never suggested that every millennial can afford a $400K house, but rather that it's not an impossible reach for many millennials.
This is especially true for married millennials who haven't had children yet. I think too many people focus on the idea of the single millennial purchasing a home on a single income and living there alone, but in practice it's usually people getting married and settling down somewhere together on two incomes.
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> In less than 3 years the rent in our working class city went up 45%. I sympathize with that but I want to make sure people understand the dynamics. Prices are driven by supply and demand. If there's only one empty apartment in the city and you're willing to pay $2000/month, I am gonna have to pay $2100 month if I want to live there instead of you. That's sort of separate (though related to) prices of houses. What w…
> COVID, defund the police, rising crime, suburbs more attractive with work from home, etc. If there are any cities for which this is true, it’s cities like Seattle and Portland. Theoretically, they are not desirable to live in because of COVID, very high crime rates, not idea for working from home, huge public safety problems, etc. But rent is higher than it has ever been.
Or maybe your sources are more interested in selling fear than accuracy.
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Zillow has listed a staggering 93% of the hundreds of Phoenix homes it owns at a loss [1] 1. https://www.businessinsider.com/zillow-offers-ibuyer-sell-ph...
“Listed”, not sold. Homes typically go for well over listing
In a bull market, about 50% of homes sell above list price [1]... It can change quickly.
1. https://magazine.realtor/daily-news/2021/06/01/a-record-shar...